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9 I A 



















PUNCHED HOLE 
ACCOUNTING 



Published and Copyright , 1924 

International Business Machines Corporation 
Ji Tabulating Machine Division 


NEW YORK 



This book is the property 
of The Tabulating Machine 
Company. It has been regis¬ 
tered in accordance with the 
following number, and is sub¬ 
ject to return upon call. 

No. 


JUN -7 1924 


©C1A793538 

Ovd I 







































































- * 




































. 
























J? 


Punched Hole Accounting 

Part I 

The purpose of this Sales Manual is to help our 
Sales Organization serve business better, secure 
more orders and increase the earnings of each 
individual member. In order to receive the full 
benefit of this Manual, you must read it, study 
it, understand it, believe in it and act upon the 
principles, policies and suggestions it contains. 
It is the duty of every salesman to develop his 
selling abilities so he can thoroughly explain 
the purpose and benefits of the device and serv¬ 
ice he is selling and prove to his prospective 
customers the truth of his statements. 

The mere reading of this Manual will not 
make you a successful Tabulating Machine 
salesman but, properly studied, it will furnish 
the basis and point the way for you to make 
yourself a real Tabulating Machine salesman. 
The most valuable kind of education is self- 
education. 

1. Salesmen should study their line. This 
Manual will tell you what and how to study. 


7 


Punched Hole Accounting 

2. Salesmen should work their territories 
more closely. This Manual will tell you how to 
work your territory to the best advantage. 

3. Salesmen should strengthen their ap¬ 
proach. This Manual will tell you how to do so. 

4. Salesmen should demonstrate the results 
obtained from Tabulating Machines, as applied 
to the prospect’s business. This Manual con¬ 
tains the necessary information for making 
such a demonstration. 

5. Salesmen should learn more answers to 
sales objections. The study of this Manual will 
assist the salesman in meeting sales objections. 

6. Salesmen should close more orders. This 
Manual will tell you how to close more orders. 

7. Salesmen should m'ake more money. This 
Manual, properly studied, will enable you to 
make more money. 

8. Salesmen must first learn what to do, how 
to do it—then do it. 

It is not a question of “when business opens up.” 
It is a question of whether you have the ability to 
(f open up business” 

Do not try to find prospects—make them. 
The making of prospects, in turn, makes sales 
and increases earnings. 


8 


Punched Hole Accounting 


Five Essentials to a Salesman^ Success 

The five essential qualities of a successful 
salesman are: 

First. HEALTH 
Second. HONESTY 
Third. ABILITY 
Fourth. INDUSTRY 

Fifth. KNOWLEDGE OF THE BUSI¬ 
NESS. 

Health 

Health is essential not only because it is dif¬ 
ficult for a man suffering from poor health to 
do his work properly, but because a man physi¬ 
cally run-down is generally mentally run-down. 

A man who is healthy is full of vitality and 
better fitted to overcome the objections ad¬ 
vanced by prospects than a salesman who is in 
ill health. A sickly, nervous man cannot exert 
that personal magnetism which is so necessary 
to the success of every specialty salesman. A 
sickly man is almost always self-conscious and 
self-centered. He realizes his weaknesses and 
does not feel capable of coping with other men. 
He lacks that self-confidence which is essential 
in overcoming difficulties. 

The fundamentals of good health are right 


9 


Punched Hole Accounting 

living’, right thinking, correct eating, plenty of 
exercise and sufficient sleep. 

Honesty 

We are not referring now to that honesty in 
money matters, which is taken for granted as 
being one of the necessary qualifications of any 
successful business man, but rather to the fact 
that the attitude of the salesman must be 
honest and sincere. 

A salesman who presents to a prospect argu¬ 
ments in which he himself does not wholly be¬ 
lieve, will fail to convince the prospect. Many 
salesmen who are otherwise shrewd and cap¬ 
able, do not make the success they should be¬ 
cause they do not impress their prospects as 
being entirely sincere. 

A salesman must be honest and believe in his 
goods before he can make other people believe 
in them or believe in him. Be honest with 
yourself in the little things pertaining to your 
duties as a salesman—in the time you start out 
in the morning, the time you quit at night, the 
number of people you see daily and the service 
you render to your customers and prospects and 
to your company. Your conscience will tell you 


10 


Punched Hole Recounting 

what is right and what is wrong. To be suc¬ 
cessful in any business, you must follow the 
dictates of your conscience. 

Ability 

Every man has a certain amount of natural 
ability; the remainder of it is acquired. A 
salesman may develop his ability by the study 
of books on Manufacturing and Distribution, 
Accounting and Finance and by learning from 
the experience of successful men. It has been 
said that salesmen are made as well as born, but 
the salesman who has been born with selling 
talents and then develops them through study, 
becomes a real salesman, in every sense of the 
word. 

Industry 

Industry, as applied by a salesman, means 
more than simply keeping constantly busy. 
Poorly directed effort is not much better than 
laziness. A really industrious man keeps busy at 
the most important work before him. A sales¬ 
man’s most important work is to secure orders. 
Orders cannot be secured by sitting in the office 
studying systems, devoting time to details, 
making out elaborate reports and trying to build 


11 


Punched Hole Accounting 

up a desk job. A salesman’s time counts for 
most when it is spent in the presence of pros¬ 
pects. 

Knowledge of the Business 

Knowledge of the business depends, largely, 
on a salesman’s ability, honesty and earnest¬ 
ness. Knowledge of the business is acquired 
through study and mental effort and is within 
the grasp of every salesman connected with 
this Company. 

A salesman cannot be sincere in explaining 
the advantages of Tabulating Machines if he 
himself does not understand and believe in 
those advantages. Too many salesmen who 
would otherwise be great successes, are failing 
because they depend too much on their natural 
ability and what they can pick up at random, 
rather than devoting an hour a day studying 
and acquiring knowledge of the business which 
would insure advancement and increased com¬ 
pensation. 

Of first importance to the salesman is a thor¬ 
ough knowledge of his own business. Of equal 
importance is a knowledge of the business of 
his user or prospective customer. To obtain 
the maximum results, it is necessary to not 


12 


Punched Hole Accounting 

only know how to apply Tabulating Machines 
to your prospect’s requirements, but also to be 
able to point out the weaknesses in your pros¬ 
pect’s present methods which will make the ap¬ 
plication of Tabulating Machines profitable to 
him. 

Knowledge is the result of study, and in this 
business continued study is necessary. The 
plans and methods of yesterday, which met the 
business conditions then, will not meet the busi¬ 
ness conditions of today. 

“A man progresses just so long as he is will¬ 
ing to learn.” 


Two Kinds of Selling 

There are two distinct kinds of selling: Staple 
and Specialty. 

Specialty selling requires: 

First—A higher type of sales ability. 
Second—More aggressive and persistent 
effort. 

Third—A more thorough knowledge of the 
product. 

Fourth—A more thorough knowledge of 
the prospect’s needs. 

Fifth—The ability to create a desire for the 
product. 


13 


Punched Hole Accounting 

The methods used to sell staples are not suc¬ 
cessful in the selling of Tabulating Machine 
service or other specialties. The Tabulating 
Machine business requires specialty selling 
methods. 

Staples are sold on the basis of known require¬ 
ments and to a market where the demand al¬ 
ready exists. Specialties are sold on the basis 
of what they save, and the desire for them 
must be created. The first principle a specialty 
salesman must understand is that his goods 
are to be sold on the basis of what they are 
going to save and earn—not upon how they are 
built, look or operate. 

Salesmen entering the Tabulating Machine 
field must distinguish between staple and spe¬ 
cialty selling and quickly realize that the great 
demand for Tabulating Machines must be 
created. It is true that the present users of 
Tabulating Machines offer an opportunity for 
many additional sales, but this field is limited 
as compared with the, real field of non-users, 
who do not realize the advantages of Tabulating 
Machines. Thousands of concerns are using 
obsolete accounting methods and secure limited 
reports of their business operations as they 
have not been convinced of the advantages 


14 


Punched Hole Accounting 

which may be obtained through the adoption of 
Punched Hole Accounting, made possible 
through the use of Electric Tabulating and Ac¬ 
counting Machines. 

The Tabulating Machine salesman must be 
guided by what he feels are the prospect’s busi¬ 
ness needs and not by what the prospect says. 

If the prospect advises you that he requires 
but a limited amount of information, necessi¬ 
tating possibly a single distribution, do not at¬ 
tempt to apply machines on this or any other 
limited basis, but rather sell the prospect on 
the advantages of securing not an excess, but a 
reasonable amount of details covering the oper¬ 
ations of his business, in order to enable him 
to intelligently study the various factors of his 
operations, thereby guarding against erroneous 
conclusions or the adoption of wrong policies, 
due to the impressions created from a limited 
amount of information which may only give a 
part answer and not reflect the actual condi¬ 
tions. 

The Purpose of Tabulating Machines 

Tabulating Machines permit the use of science 
in business. They make possible an analytical 
review of operating factors, whether of a manu- 


15 


Punched Hole Accounting 


facturing, distributing or service nature, from 
various angles. Wrong tendencies can be lo¬ 
calized and rectified before they have an oppor¬ 
tunity to progress to a point which will result 
in an unknown but continuous loss to the busi¬ 
ness. 

The repeated use of the same set of figures, 
but analyzed from different viewpoints, as¬ 
sures the obtaining of a complete and detailed 
knowledge of actual results. But if deficient 
tendencies or conditions exist, and but limited 
data of the operations is secured, they would not 
be noticeable if the excess factors were suf¬ 
ficiently large to offset the deficient ones, the 
net result indicating an apparently satisfactory 
condition, although certain factors in the net 
results are unsatisfactory. 

The use of net results based on limited de¬ 
tails is a dangerous one as with the increase in 
the operations of a business, the deficient fac¬ 
tors, which may grow slowly over a period of 
years, will result in a steady but certain loss 
which will not be known or realized until its 
volume may become so large, especially if oper¬ 
ating conditions should suddenly change, that 
it will offset or materially decrease the factors 
which have created the excesses or additional 


16 


Punched Hole Accounting 


profits, thus making it correspondingly more 
difficult to adjust and rectify the conditions that 
have existed for a number of years, but were 
not apparent, due to the limited amount of in¬ 
formation available with which to study the 
progress of the business. 

The use of Electric Tabulating and Account¬ 
ing Machines assists in preventing conditions 
of this nature. Tabulating Cards store informa¬ 
tion for current use or for future study and 
permit arriving at intelligent decisions based 
on known factors. The cards containing the 
records of transactions for preceding periods 
can be readily sorted and analyzed to reflect the 
results which would have been obtained during 
past periods had proposed changes in policy 
been in effect at that time. 

Estimates, guesses or assumptions are elim¬ 
inated in business through the use of Electric 
Tabulating and Accounting Machines. 

What the T. M. Company Gives and Demands 

The Tabulating Machine Company gives you 
one of the best selling propositions in the world. 
This Company is the pioneer in the principle of 
Punched Hole Accounting. Its mechanisms are 
of the highest quality and its machines supply 


17 


Punched Hole Accounting 

the user with statistical reports and statements 
at a cost far below that of any manual or other 
method. It furnishes you with equipment ro 
take care of every kind of business. It provides 
advertising to assist in the development of your 
field. It offers you the opportunity to make 
money without the investment of capital. 

In return, it demands only the loyalty and 
wholehearted interest of keen business men— 
men who are industrious and willing to work— 
men who will find the best ways to do the things 
that should be done—men who will study the 
best methods, and learn the best ways to over¬ 
come obstacles—men who are open-minded and 
willing to learn—men who recognize the neces¬ 
sity of changing their plans and methods in 
order to meet changing business conditions— 
men who are determined to succeed and make 
money for themselves and for the company. 

Systematic, conscientious work, coupled with 
common sense, a thorough belief in your prod¬ 
uct, and a wholehearted desire to succeed, will 
win in this, as in any other business. 

Mental Attitude 

Your determination to succeed and your will¬ 
ingness to pay the price for success, depends 


18 


Punched Hole Accounting 

upon your mental attitude. Confidence in your¬ 
self, your company and the product you are 
selling* is essential. 

Thoroughly believe in your company and your 
product. 

Confidence comes through knowledge. Fear 
is the result of ignorance and uncertainty. 
Study will furnish you with all of the necessary 
knowledge of the Tabulating Machine business 
and will create within you a feeling of confi¬ 
dence in the company, in its product and in 
yourself. 

This business will always require study, and 
unless you keep abreast with the best and most 
modern selling methods, others will pass you 
and be more successful than you. Therefore, it 
is to your own benefit to study and apply your¬ 
self and master, as far as possible, all of the 
details of this business. 

Your Object: Success 

Success is what every man is striving for, 
and your success depends very largely on your 
mental attitude. 

Success is the result of work. How hard and 
how well you work, depends upon your en¬ 
thusiasm. Enthusiasm is generated through 


19 


Punched Hole Accounting 

knowledge, and knowledge comes from close and 
persistent study. 

The purpose of study is to learn, and we learn 
in five ways. 

First. By observing. 

Second. By listening. 

Third. By reading. 

Fourth. By discussing. 

Fifth. By thinking. 

The salesman who knows his business thor¬ 
oughly is always earnest, confident, courageous 
and enthusiastic. He naturally commands at¬ 
tention. He speaks with authority. He knows 
he is able to do his prospective customer a real 
service and his voice carries conviction and 
confidence, which the prospect quickly recog¬ 
nizes. 

You cannot tell your prospect something 
which you do not thoroughly understand your¬ 
self. When you do not know your subject, your 
user or prospect can tell that you do not. When 
you know your subject well and you realize that 
you know it, you are inspired by a confidence 
which makes it just as easy for you to approach 
a bank president as to approach a clerk in the 
accounting department. 


20 


Punched Hole Accounting 

Things a Tabulating Machine Salesman Must 
Know 


1. His product. 

2. The necessity for his product. 

3. Accounting and statistical methods in use. 

4. His field. 

5. How to plan his work. 

6. How to work his plan. 

7. How and what to study. 

8. How to canvass. 

9. How to properly work his territory. 

10. How to develop his territory. 

11. How to use advertising. 

12. How to follow up inquiries and tips. 

13. How to secure interviews. 

14. How to conduct interviews. 

15. How to approach a prospect—what to say 
and how to say it. 

16. How to secure consent for a demonstra¬ 
tion. 

17. How to make demonstrations. 

18. How to close orders. 

19. How to avoid postponement. 

20. How to get quick action on sales. 

21. How to cooperate with his associates. 

22. How to anticipate objections. 


21 


Punched Hole Accounting 

23. Objections to be expected and how to 
answer them. 

24. Conditions to be expected and how to 
handle them. 

25. What selling arguments to present. 

26. The prices, rules and decisions of his 
company. 

Self-Respect 

A salesman should always conduct himself 
in a manner that will reflect credit upon himself 
and his Company. The opinion the public has 
of you, your Company and the product you are 
selling, is based solely on the way you conduct 
yourself in your territory. The man who does 
not respect himself cannot expect others to 
respect him or his business. 

Personal Appearance 

The salesman who is seldom turned down in 
an interview is the well-appearing salesman. 
First impressions are of great importance. If 
a prospect likes your appearance, you have 
gained a point. All men like to talk to a man 
who appears active and wide-awake. 

It is unnecessary to go into details regarding 
personal appearance. Cleanliness and neat- 


22 


Punched Hole Accounting 

wearing apparel are business assets that are 
appreciated by every business man. 

Courtesy and Good Manners 

Courtesy and good manners are qualities 
every salesman should develop. The outward 
sign of courtesy is good manners. They can 
be acquired without cost, and yet there is 
nothing a salesman possesses which pays larger 
dividends. Good manners enable a salesman 
to appear at ease in the most trying situations. 

The impression the salesman leaves with 
those whom he has failed to sell, has a great 
bearing on how he will be received on his next 
visit. A single discourteous word or action 
may lose a sale. Courtesy is something more 
than politeness and good manners. It is polite¬ 
ness and good manners, plus consideration and 
respect for others. Earnestness, politeness and 
good manners will aid in securing many inter¬ 
views and making many sales. 

Tact 

More sales are lost through the mistakes of 
the salesman than the skillful opposition of 
the prospect. 

Tact is that quality in a salesman that en- 


23 


Punched Hole Accounting 

ables him to deal, without friction, with others. 
It enables him to adapt himself to circum¬ 
stances and say the right thing, in the right 
way, at the right time. 

Lack of tact is largely a matter of ignorance, 
thoughtlessness and selfishness. A salesman 
without tact antagonizes prospects more fre¬ 
quently than he secures interviews. Many 
salesmen show their lack of tact by airing their 
views on politics, religion, prohibition, business 
conditions, public officials and similar topics. It 
is easy for the salesman to find out what busi¬ 
ness his prospect is engaged in, but he has no 
way of knowing his views on these other sub¬ 
jects. A salesman should refrain from all dis¬ 
cussions not pertaining to the prospect’s busi¬ 
ness, and his own. Your job is not that of a de¬ 
bater or reformer, but a Tabulating Machine 
salesman. 

Confidence 

Have confidence in yourself and in the service 
Tabulating Machines will render—confidence 
that Tabulating Machines will save money for 
your prospect, either by supplying the same 
class of information at a lower cost or by sup¬ 
plying more information at a lower cost, per sta- 


24 


Punched Hole Accounting 

tistical report, thereby enabling the user to ob¬ 
tain knowledge of his business that it would not 
be practicable, because of excessive costs, to 
secure manually. 

Have confidence in your ability to properly 
present your proposition, to meet objections 
that are raised and to overcome them, and to 
finally make your prospect realize the advan¬ 
tages of the plan you offer and secure the order. 

Always endeavor to close on as nearly the first 
call as possible, as every subsequent call that 
can be eliminated reduces the selling cost and 
places additional time at the disposal of the 
salesman, which can be utilized in closing other 
orders. 

Initiative 

Are you a self-starter or do you have to be 
told? 

There are three classes of salesmen: 

First—Those that have to be told three or 
four times to do a thing, and even then there is 
no certainty that they will carry out instruc¬ 
tions. 

Second—Those that have to be told but once 
to do a thing. 


25 


Punched Hole Accounting 

Third—Those that, without being* told, do the 
things that should be done. 

This latter type possesses initiative. The 
ability to carry out instructions is valuable, but 
the salesman with the ability to anticipate in¬ 
structions is of much greater value both to him¬ 
self and to his company. 

There are many salesmen who are contin¬ 
ually asking for assistance and who, regardless 
of how much help is given, never seem to be 
able to apply the information received to more 
than the one case. They never seem to learn 
the value of figuring things out for themselves. 
The real, high-grade salesmen are the ones who 
have the ability to work out their own problems, 
but if they do require the help of others, require 
it but once on the same subject. 

The salesman who possesses initiative, cre¬ 
ates opportunities and knows how to make un¬ 
usual conditions produce unusual results. 

Tabulating Machine salesmen must possess 
ingenuity, initiative and the ability to origin¬ 
ate new plans and new methods, and intuitively 
analyze a condition and determine the best 
course of procedure. Past methods in the ap¬ 
plication of Tabulating Machines should be 
modified to meet existing conditions and should 


26 


Punched Hole Accounting 

not be used merely because they were success¬ 
ful in other places, as internal conditions or 
routines are not uniform. Learn to originate 
new uses in accordance with your prospect’s 
needs. Do not discard the application which 
has proven successful at some other installa¬ 
tion, but change it to fit your prospect's busi¬ 
ness, thereby assuring a successful installation. 

Resourcefulness 

Resourcefulness is ability to meet and over¬ 
come unexpected obstacles. Resourcefulness 
results from a thorough knowledge of your 
business, your prospect's business and human 
nature. 

Courage 

Many salesmen fail through lack of courage. 
Lack of courage is really the result of lack of 
knowledge. 

There is no reason why a salesman should 
lack courage in the Tabulating Machine busi¬ 
ness. He knows that he represents the pioneer 
in the principle of Punched Hole Accounting— 
the oldest and largest concern of its kind in the 
world. He knows he has the finest devices of 
their kind to offer. He knows he can do the 
prospect a real service. 


27 


Punched Hole Accounting 

If a salesman thoroughly believes in his pro¬ 
duct and in himself, he will not be handicapped 
by lack of courage. 

Self-Satisfaction 

Many salesmen learn one way of doing a 
thing, and then try to adhere always to that 
method. The really successful man is never 
fully satisfied with himself. When you begin 
to feel satisfied with yourself and your methods, 
and ignore the ideas of others, you are not pro¬ 
gressing. The first sign of going “stale” and 
eventually failing, is indicated by a feeling of 
self-satisfaction—that you are beyond the point 
where you can learn from others. 

Open-Mindedness 

One of the weaknesses particularly noticeable 
in some salesmen, is that they think they know 
all there is to be known about their work. They 
resent suggestions from others and take no in¬ 
terest in new plans, new methods or new ideas. 
They are satisfied to continue in the same rut 
they have been in all their lives. 

Such men are seldom really successful. The 
successful salesman must be open-minded. If 
he is to acquire knowledge that he does not al- 


28 


Punched Hole Accounting 

ready possess, he must be willing to learn from 
others. He should welcome constructive criti¬ 
cism, suggestions and new ideas from others 
and adopt anything that will help him increase 
and develop his selling ability. 

Open-mindedness is a valuable asset. It is 
the quality that keeps a man up-to-date and en¬ 
thusiastic about his work. Salesmen do not 
stand still—they either progress or retrogress. 

Loyalty 

Loyalty is the result of enthusiasm and belief 
in your company, its policies and its products. 
Loyalty to the policies of the company, to the 
customer’s interests and to the right standard 
of doing business, is something that every sales¬ 
man owes to himself and his associates. 

True loyalty is a trait that is always appreci¬ 
ated by your prospects, your associates and 
your superiors. 

If you can’t believe in the company you are 
working for, its product, policies and methods, 
you are not in line. Line up! 

Supervision and Self-Supervision 

Supervision is telling others what to do, how 
to do it and then seeing that it is done. 


29 


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Self-supervision is the ability to tell yourself 
what to do, find out how to do it, and then make 
yourself do it. It should be the ambition of 
every salesman to become a sales executive. One 
of the necessary requirements to fill such a po¬ 
sition is to be able to supervise others. Before 
you can supervise others, you must learn how 
to supervise yourself. In sales work, very often 
the difference between success and failure lies 
in the ability of the salesman to properly direct 
his own efforts or to supervise himself. The 
salesman who wastes time waiting for others 
to tell him what to do and making it necessary 
for others to see that it is done properly, is 
overlooking one of the most important points 
that distinguishes the successful salesman. If 
you would be a great success, learn to supervise 
yourself, which simply means to learn to plan 
your own work, to properly work your plan and 
to direct your own efforts where they will pro¬ 
duce the best results. The most valuable kind 
of supervision is self-supervision. 

Self-Analysis 

Self-analysis is one of the most valuable at¬ 
tributes a salesman can develop because self- 
analysis makes possible self-education and self- 


30 


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supervision. Self-analysis increases knowledge 
and develops initiative, tact, resourcefulness and 
judgment. It enables the salesman to better 
direct his efforts and insures greater results 
from the effort expended. Learn to analyze 
your failures and you will be able to locate your 
weak points and strengthen them. Self- 
analysis is necessary in everything the salesman 
does. 

If your record is not in the hundred per cent, 
class, analyze it and you will soon learn what 
is necessary to do to increase it. If you fail 
to secure an interview, an analysis of your fail¬ 
ure will show you what you have done that you 
shouldn’t have done or what you have left un¬ 
done that you should have done. If you fail 
to secure a definite appointment for a demon¬ 
stration analyze the reasons and you will soon 
know why you have failed. If your demonstra¬ 
tions do not result in as many sales as they 
should, an analysis of your method of demon¬ 
stration will soon enable you to strengthen it 
to the point where it will assure the desired 
results. If you are not making the success you 
should, an analysis of what you are doing and 
how you are doing it will quickly give you the 
real reasons. Success or failure is simply a mat- 
31 


Punched Hole Accounting 

ter of cause and effect, because success or failure 
is in itself an effect, and the result of a cause. 

Self-analysis will point the way to the causes 
of both success and failure and enable you to 
acquire the knowledge, the methods and the es¬ 
sentials that will result in success. Too much 
importance cannot be put on the value of self- 
analysis. It is the only route by which we can 
locate our own weaknesses and shortcomings 
and learn what is necessary to do to overcome 
them. 


Work 

Many salesmen fail because they do not back 
up their physical effort mentally. 

There are two kinds of laziness—physical 
and mental. To be successful, you must be both 
mentally and physically industrious. 

The greatest essential to continued success is 
WORK. Have your work planned in advance, 
get out into your territory early and keep work¬ 
ing all day. There are no “bad times ,, for the 
hard, systematic worker. 

Reasons Why a Salesman May Fail 

First: He may not take proper care of his 
health, thus reducing his energy and ambition. 


32 


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Second: He may lack tact and antagonize 
his prospect. 

Third: He may be careless in his appearance 
and create a poor impression. 

Fourth: He may lack dignity, and thus pre¬ 
vent himself from securing interviews. 

Fifth: He may lack enthusiasm and earnest¬ 
ness, and thereby fail to convince his prospect. 

Sixth: He may become too familiar or 

friendly with his prospect, making it easy for 
the prospect to turn him down. 

Seventh: He may not use advertising matter 
properly, thus handicapping himself in culti¬ 
vating his field. 

Eighth: He may not send out circular let¬ 
ters and advertising literature in his territory, 
thus handicapping himself in increasing his 
prospect list. 

Ninth: His office may not be properly ar¬ 
ranged or his demonstrating machines displayed 
in the best manner, resulting in failure to im¬ 
press his prospect with the value of his proposi¬ 
tion. Or, if the demonstration is made at the 
office of one of the customers, and it does not 
make a good impression, the salesman is re¬ 
sponsible, as the purpose of monthly service 
calls is to teach the user the proper method of 
33 


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applying Tabulating Machines to their work* 
increasing their use and operating them in a 
manner to secure the best results. If these 
requirements are properly taken care of by the 
salesman, the prospect will be impressed, not 
only by the great value of Tabulating Machines, 
but by the fact that they do the work and supply 
accurate results in an efficient but simple man¬ 
ner. 

Tenth: He may not properly demonstrate, 
making it difficult for his prospect to thoroughly 
understand the advantage of his proposition. 

Eleventh: He may not use information and 
arguments appearing in the Sales Manual, gr 
other data prepared for him by the company 
from time to time, which would increase his 
knowledge and selling ability. 

Twelfth: He may not study up-to-date 

methods of selling which would tend to impress 
the importance of his proposition on the mind 
of his prospect. 

Thirteenth: He may not adopt new ideas 
and suggestions offered from the experience of 
others. 

Fourteenth: He may not call on a sufficient 
number of prospects daily, thereby limiting his 
number of sales possibilities. 


34 


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% 

Fifteenth: He may not work, daily, all of the 
hours he should, thereby limiting his prospect 
calls. 

Sixteenth: He may not be calling upon all 
of the various kinds of businesses in his terri¬ 
tory, thereby reducing, in effect, the size of 
his territory and limiting his sales. 

Ninety per cent, of the failures in any busi¬ 
ness are caused by lack of hard, conscientious, 
systematic and intelligent work. 

Duties of a Salesman 

1. To believe in your company, your territory 
and your product 

2. To thoroughly understand the things you 
must do—then do them. 

3. To give yourself, your company and your 
customers your best efforts. 

4. To make your business your first considera¬ 
tion. 

5. To obey orders and carry out instructions. 

6. To follow company policies to the letter. 

7. To realize that your customer’s satisfaction 
is your and your company’s success. 

8. To work all of your territory and all kinds 
of businesses in your territory. 

9. To secure your quota. 


35 


Punched Hole Accounting 

10. To make money for yourself and the com¬ 
pany. 

How To Operate a Territory 

Look upon the Tabulating Machine business 
in your territory as your own. Build it up and 
improve it. Always sell the machine best suited 
to the prospect’s needs. See that machines are 
properly installed and that the user and his em¬ 
ployes thoroughly understand their purpose and 
increase their use constantly by applying new 
and additional classes of work to them. Do 
plenty of advertising, both by personal distri¬ 
bution and by mail. Follow up all inquiries 
promptly. Every territory is expected to pro¬ 
duce its quota and will, if worked properly. 

Office Details 

A salesman’s time is too valuable to spend 
doing detail work around the office. Detail 
work should be reduced to the minimum. The 
largest part of the detail work and correspond¬ 
ence between the salesman and the company is 
caused through mistakes, carelessness and lack 
of knowledge on the part of the salesman. 
It is more profitable to permit the stenog¬ 
rapher to attend to all of the office details than 


36 


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it is to devote your time to such work. The 
salesman’s time should be spent in the presence 
of prospects. 

Work Your Territory Closely 

To work your territory closely and to get the 
best results out of your work, you first must 
adopt a plan and then follow it. 

With the same effort, systematic work will 
always accomplish more. Many salesmen put in 
hours enough to secure much better results, but 
the greater portion of their time is wasted 
through not following a definite plan. You 
cannot tell who is a prospect until you call on 
him. Look upon every business man in your 
territory as a prospective user for either Tabul¬ 
ating Machines or Ticketographs. Don’t try 
to decide their possible interest in your propo¬ 
sition on the outside of the building; the place 
to determine this is on the inside before the 
prospect, as many apparently small concerns,- 
with only offices in your territory, have large 
factories at outlying points. Call on all places 
of business, therefore, from the smallest to 
the largest, as many concerns too small to use 
Tabulating Machines at present can use the 
Ticketograph, and further, these present small 


37 


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concerns may grow to large concerns and be¬ 
come excellent Tabulating Machine prospects at 
a later period. In prospecting for Tabulating 
Machine and Ticketograph business, however, 
apportion your activities relatively between the 
two products. 

Visit all of the towns in your territory reg¬ 
ularly and work them constantly as the greatest 
volume of sales will continue to come from the 
non-users. 


Plan Your Work 

This business necessitates salesmen covering 
their territories continuously. Successful sell¬ 
ing results from the wise and careful planning’ 
of prospecting effort. 

Each day’s work should be planned in advance 
and the entire day, or as much of the day as it 
is essential to spend to call on all prospects 
located in a defined locality, should be expended. 
Salesmen should concentrate their efforts in a 
specific locality and not diffuse them by calling 
on a prospect in one section of their field and 
then expend energy and probably retrace their 
steps, at least in part, by calling on another 
prospect at the other end of their territory. 
Conservation of traveling time in order to spend 


38 


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the maximum number of hours in the presence 
of prospects is an essential to success in this 
business and when adhered to is productive of 
results, but when ignored, results in low records. 
If you do not make a sale to a prospect on one 
trip, begin to plan your next trip immediately, 
review the interview just closed to determine 
what points you made which you can use on 
your next call and those you must strengthen 
yourself on. 

Another thing of great importance is to add, 
daily, a number of prospects to your list. After 
you have completed your call on a prospect, 
look around in the same vicinity and see if there 
are other concerns on whom you have not al¬ 
ready called. Take this opportunity to make 
an initial call, leave some advertising and list 
them for future attention. In every business 
the high records are always made by the men 
who have the greatest number of prospects 
that are constantly in the process of develop¬ 
ment. 

By planning your work you will find you are 
constantly adding more prospects to your list 
which will develop into additional sales, and 
will result in increased earnings for the sales- 


39 


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man, more business for the Company and bet¬ 
ter records for the territory. 

The Value of a Prospect List 

A prospect list is of value only when it is 
properly used. Prospect lists that are compiled 
and never referred to are a waste of time. Pros¬ 
pect lists that are compiled, constantly referred 
to, added to, and developed through personal 
calls and by the use of advertising, rapidly 
mature into sales. 

Your prospect list is your greatest asset. 

The Value of the Daily Call Report 

The purpose of the daily call report is two¬ 
fold: 

First, it is the best method for the salesman 
to tabulate the information necessary for the 
building and checking of his prospect list. 
Properly used it is a constant reminder of when 
to make the next call, when to send out advertis¬ 
ing matter, and is the basis on which you build 
your plan of working your field. 

Secondly, it is valuable to the company be¬ 
cause it is the only safe method by which the 
company’s prospect list can be kept alive and 
up-to-date. It enables the company to assist 


40 


Punched Hole Accounting 

the salesmen by mailing advertising from the 
Home Office and insures the greatest benefits 
to the salesmen from the direct-by-mail adver¬ 
tising campaigns. 

The daily call reports should be made out and 
sent to the company at the end of each day 
when the information is clear in the mind of 
the salesman. They help the salesmen in plan¬ 
ning their next day’s work and insures their 
prospect lists being complete, alive and up-to- 
date. It also helps the company assist the sales¬ 
man by being able to mail advertising to all 
prospects. 


Seek New Prospects Daily 
Many salesmen reduce their effectiveness and 
earnings by working on a small number of pros¬ 
pects and not soliciting new ones every day. It 
is necessary to call on present prospects, but it 
is also necessary to build for the future, which 
means that a certain number of new prospects 
should be called on daily. Every salesman 
knows of what might be termed the “spas¬ 
modic” record; that is, a large record once every 
few months with very small records for the 
months in between, which, for the year, means 
only a low average record. 


41 


Punched Hole Accounting 

The really successful salesman is the man 
who produces a consistent good record monthly. 

As a general rule, the reason for the “spas¬ 
modic” record is that the salesman is working 
on a limited number of prospects which, when 
sold, leave him no developed prospects. 

By adding to your prospect list daily, you are 
continually educating prospects to the point 
that insures a consistent monthly quota record. 

Advertising and How to Use It 

Advertising matter is only valuable after it 
is distributed to prospects. The purpose of ad¬ 
vertising is to create in prospective purchasers’ 
minds interest in the proposition you have to 
sell and to assist the salesman in more quickly 
educating the prospect to the point of purchase. 

The advertising in the Tabulating Machine 
business can be classified under the following 
heads: 

1. General publicity, which is done through 
magazines, trade journals, etc. 

2. Direct-by-mail advertising, in the way of 
broadsides, circulars, circular letters, etc., 
mailed out by the Company direct. 

3. Advertising that is distributed and mailed 


Punched Hole Accounting 

by salesmen from their local headquarters, and 
circular letters sent out by each office. 

The advertising done by the Company can be 
made more productive to each individual sales¬ 
man if he will back it up by distributing and 
mailing literature from his own headquarters. 

Advertising should be used by the salesman 
as follows: 

First: Mailed to prospects in advance of calls, 
in order to create a favorable impression in the 
mind of the prospect, which will assist the sales¬ 
man in his interviews. 

Second: Distributed to prospects at the time 
of each call. 

Third: Constantly mailed to a selected list of 
prospects on whom the salesman is working or 
is about to call. 

Fourth: The Salesman’s Handbook and the 
slides, illustrating various report forms, which 
are furnished to each office, have an unques¬ 
tioned advertising value and offer an unusual 
opportunity for creating interest in the mind 
of your prospect. 

One of the best ways to increase and develop 
a prospect list is by mailing advertising supplied 
by the General Office, and circular letters to 
prospects. The salesman who will take the time 
43 


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to plan out an advertising campaign will find 
that it will open up channels for business, add to 
his prospect list, secure interviews for him and 
earn commissions far beyond his expectations. 

Thought, persistency and planning are just 
as necessary in properly using advertising as 
in properly working a territory. To secure the 
maximum results from the use of advertising, 
you must first understand what the advertising 
contains. Study all advertising, understand it 
thoroughly—its purpose and its use—and be 
able to apply the proper advertising matter in 
the right place. 

Know your advertising so completely that 
during your interview you can turn to a certain 
page and pick out a specific paragraph, or refer 
to a certain sentence to emphasize the point 
which you desire to bring out. 

Advertising can be made to be of the greatest 
help in securing interviews. A successful sales¬ 
man used the following method and found that 
it secured interviews after many other efforts 
had failed. He selected from his mailing list 
the names of a number of business men whom 
he had never been able to interview, and wrote a 
letter along the following lines: 


44 


Punched Hole Accounting 

“Dear Mr. Blank: 

I am just in receipt of a pamphlet which 
I believe will be of interest to you, and am 
mailing it to you under separate cover to¬ 
day. There are several passages which ap¬ 
pear to apply particularly to your business, 
which I have marked with a blue pencil for 
your convenience. I would appreciate it if, 
after reading, you would lay it aside, and 
the next time I am passing I will drop in 
and discuss these points with you. 

Yours very truly.” 

This method is only one of the many ways 
a salesman can use his ingenuity to open the 
door to many an interview where other methods 
have failed. “To accomplish unusual results, 
use unusual methods.” 

Many salesmen complain of the few prospects 
in their provincial territories. Lack of pros¬ 
pects in provincial territories is generally due 
to lack of proper methods of advertising on the 
part of the salesman. Many business men in 
small towns and cities hesitate to send in re¬ 
turn cards because they feel that a salesman 
would make a special trip which might place 
them under an obligation to buy. One way to 
remove this objection and secure greater bene- 
45 


Punched Hole Accounting 


fits from your provincial advertising is to have 
the return cards addressed to yourself, in care 
of the hotel in your prospect’s town or city, 
instead of to your own office. By sending out 
letters advising the prospects that you intend 
visiting their city in the near future, and by en¬ 
closing a post card addressed to you in care of 
the hotels in the towns you intend to visit you 
will receive many return cards which would 
otherwise never be mailed. 

How to Work a Provincial Territory 

Provincial territories will pay as high a pro¬ 
fit, per point, as city territories, but the work 
must be carefully planned. The very fact that 
the travelling time of working provincial ter¬ 
ritories is greater than that of a city territory, 
deters many salesmen from taking advantage 
of the vast opportunities existing in this field. 

The only reason why some provincial terri¬ 
tories are not more profitable is because the 
salesman tries to cover too much territory in a 
short space of time. 

As a general rule, business men in small towns 
are easier to approach than business men in the 
larger cities. They are just as up-to-date, just 
as anxious to make money and the reasons they 
46 


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are in business are identical with the reasons 
of the city business men. 

The daily call reports show conclusively why 
many salesmen fail to make their provincial ter¬ 
ritories profitable: 

In the first place they work too fast. 

In the second place, they do not see all the 
prospects in each town. 

The provincial salesman should thoroughly 
plan his work before he starts on a trip. He 
should arrange the itinerary of the towns he 
intends to visit, in the proper sequence, which 
will reduce railroad fares to the minimum. 

Carry with you at all times the Salesman’s 
Handbook, together with sample Tabulating 
Cards and literature, and in such cases where 
conditions warrant and plans have been made 
in advance, the stereoptican machine and slides 
can be used to advantage. 

A week or ten days before leaving on a trip 
through your territory send out general adver¬ 
tising to all of the concerns in each town. 
As a suggestion, take the map of your territory 
and decide what part of it you are going to 
operate in during that particular trip. Stay in 
each town long enough to see every prospect 
you have circularized. 


47 


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Call on every prospect, large or small, before 
you leave town. Any salesman in this business 
will find many prospects in small towns who can 
be interested in Tabulating Machine service if 
he will only take the time to approach them. 
Many salesmen do not work the small towns 
and cities in their territories until they 
have received an inquiry. They make the 
journey, see the one prospect and, in many 
cases, leave immediately after they have inter¬ 
viewed the prospect who sent in the inquiry. 
This, naturally, is expensive and discouraging 
and no salesman can make a success of a pro¬ 
vincial territory by operating it in this manner. 

If you would make a real success of your pro¬ 
vincial territory, try working it along the lines 
suggested and you will find it will rapidly be¬ 
come one of the most profitable parts of your 
field. 

A Salesman’s Equipment 

Good equipment is essential to success. A 
salesman without suitable equipment is like a 
carpenter without proper tools. He is unable to 
do his work properly or to take advantage of the 
opportunities open to him to secure business. 

48 


Punched Hole Accounting 

Neither is he able to successfully use the knowl¬ 
edge he has already acquired. 

A salesman’s equipment should be complete 
in every detail. It should consist of all of the 
latest arid most up-to-date advertising issued 
by the Company. The Manual and the Sales¬ 
man’s Handbook should be carried at all times, 
the latter being constantly used when interview¬ 
ing prospects and customers, and further, many 
opportunities are offered on trains and street 
cars for study and the acquiring of more knowl¬ 
edge. A scrap book should be kept with clip¬ 
pings of anything and everything that will en¬ 
hance the value of his proposition. 

Prospect lists should be kept up-to-date and 
constantly added to. Report blanks should be 
always on hand and daily reports made out ana 
sent in regularly at the close of each day. 

Contract forms should always be handy be¬ 
cause you never know when you will have the 
opportunity to close an order. The Industry 
Chart should be kept up-to-date and checked, 
because the prospect list and the users’ list are 
the basis for direct-by-mail advertising, and are 
of assistance in your field work. The user’s list 
contains not only the name and location of your 
customer, but a complete record of applications. 


49 


Punched Hole Accounting 


Send out circular letters and advertising matter 
frequently in order to develop and educate pros¬ 
pects. Proper service facilities should be main¬ 
tained. All necessary supplies and repair parts 
should be kept on hand so customers’ wants can 
receive immediate attention. Repairmen should 
be trained so they are capable of quickly taking 
care of any maintenance difficulty. 

Many salesmen fail because they do not rec¬ 
ognize the advantages and necessity of good 
equipment. 

Three Steps in a Sale 

There are three steps in the making of every 
sale. 

First. The interview, which is commonly 
called the “approach.” 

Second. The explanation of the goods to be 
sold, which is commonly called the “demonstra¬ 
tion.” 

Third. The securing of the order, which is 
commonly called “closing the sale.” 

A salesman’s success depends upon his ability 
to thoroughly grasp the importance of each of 
these steps and to understand the purposes to 
be accomplished in the approach, the demon¬ 
stration and the closing. 

The object of the approach is to create in the 


50 


Punched Hole Accounting 

prospect’s mind interest in your proposition. 
The object of the demonstration is to thoroughly 
explain to your prospect the advantages of 
proposition and create a desire in his mind to 
possess it. The object of the closing is to force 
your prospect to a decision to buy without delay, 
and secure the order. 

A complete understanding of the importance 
of these three steps and how to handle them in 
a competent and conclusive manner will play a 
most important part in your success. The ap¬ 
proach, the demonstration and the closing pro¬ 
vide opportunities for the salesman to apply his 
complete knowledge of salesmanship, of his 
product and of human nature. 

The Securing of the Interview 

One of the first things a salesman must de¬ 
velop is his ability to secure interviews with the 
right people. Too many salesmen are satisfied 
do discuss their proposition with clerks and de¬ 
partment heads, who will, in many cases, bar 
the way to the man higher up. 

No set rule can be laid down for the proper 
securing of an interview. That is where a sales¬ 
man’s ability, tact and resourcefulness must 
come into play. 


51 


Punched Hole Accounting 


Preparation for the Approach 

Preparation, in anything, is essential. This 
is especially true with regard to the approach. 
The better you have fortified yourself in ad¬ 
vance regarding the prospect’s business and 
your ability to serve him, the better will be your 
chance of securing his attention and interest. 
Remember, your position is similar to that of 
a physician, and you must diagnose the case 
before recommending the cure. 

Before entering the place of business, care¬ 
fully observe the exterior appearance. Is the 
establishment modern? What is the nature of 
the business—is it a machine shop, foundry, 
textile mill, etc. ? Have new additions, indicat¬ 
ing expansion, been made recently? About how 
many people are employed? 

Entering the place of business, notice the ar¬ 
rangement. What is the tone of it ? Is it wide¬ 
awake, airy and spacious or is it gloomy, stuffy 
and crowded? Is there a progressive, cheerful 
attitude? Is it equipped with modern business 
machinery—high-grade typewriters, adding ma¬ 
chines, intercommunicating telephones, address- 
ographs, Computing Scales, billing machines, 
Time Recorders, etc., indicating the prospect’s 


52 


Punched Hole Accounting 

appreciation of the value of time and money¬ 
saving devices? 

You should obtain the prospect’s name and 
full particulars before introducing yourself. As 
a general rule, the man to interview first is the 
General Manager or Comptroller. They are re¬ 
sponsible for the conduct of the business or the 
supplying of information as to the results of 
operations, and are constantly seeking new 
ideas and better methods. While in many cases 
they will refer you to one of their assistants, 
your position with the assistant will be stronger, 
as he will take your proposition more seriously 
and extend to you better co-operation. 

If you first present your plan to the Purchas¬ 
ing Agent, Accountant or some minor execu¬ 
tive you will usually waste a lot of time, and 
frequently create opposition. Very often their 
interests do not extend beyond their own de¬ 
partments and they are apt to view the pur¬ 
pose of your call from a personal standpoint 
instead of considering it as a general business 
necessity. 

Method of Introduction 

Always know the name of the man you are 
about to meet, and introduce yourself in a frank, 


53 


Punched Hole Accounting 

straightforward manner. As a suggestion, “Mr. 
Jones, my name is Blank; I represent the Tab¬ 
ulating Machine Company.” 

From this point on, the success of the inter¬ 
view depends upon your ability to make some 
statement or properly answer some remark of 
your prospect’s that will create interest in his 
mind. 

As a general rule, the attention and interest 
of your prospect can best be secured by giving 
him to understand that the object of your visit 
is to present to him a proposition which will 
help him to make money. 

Under no circumstances talk to a prospect 
who will not give you his attention. The propo¬ 
sition you have to offer is of such importance 
that it should not be treated lightly. If you 
attempt to talk to a prospect who is working 
at his desk or who has his mind on other mat¬ 
ters, you cannot make much of an impression. 
Not only do you fail to impress him, but you 
also weaken your own case and generally irri¬ 
tate him. 

Do not proceed on the theory that all busi¬ 
ness men know what their own best interests 
are. Many business men every day are doing 
things contrary to their own best interest. 


54 


Punched Hole Accounting 

Do not assume that your prospect is familiar 
with Punched Hole Accounting. Do not allow 
him to side-track you by the statement that he 
knows all about Tabulating Machines. If he 
did he would be using them—and so inform him. 

Approaching a Prospect 

After you have met the man you want to see, 
make the most of your opportunities. Business 
men like straightforward talk. Don’t resort 
to subterfuges or so-called tricky methods. 

The first thing to accomplish is to secure your 
prospect’s attention. This can best be done by 
making some statement pertaining to your pros¬ 
pect’s business, which you know will be of in¬ 
terest to him. The thought to keep in mind is 
that business men are more interested in their 
own business, in the reducing of expenses, the 
saving of money and the increasing of profits, 
than they are in some particular device or the 
way it operates. Mention of the fact that 
somebody else in the same line of business is 
using Tabulating Machines, will often create in¬ 
terest. 

The thought to impress upon the prospect’s 
mind in your first interview is that you are able 
to show him a way to reduce expenses and save 


55 


Punched Hole Accounting 

money, or supply information of a nature which, 
when properly used, will be the means of mak¬ 
ing money for him by reducing costs, increasing 
sales by making proper and diversified analyses 
of distribution, allocating the low profit-produc¬ 
ing merchandise, determining the items which 
do not produce sufficient profit to warrant 
handling, or the volume of which should be con ¬ 
trolled, and eliminating excess or unnecessary 
expenses which are contrary to good business 
but which are not known unless proper and de¬ 
tailed analyses are made. 

The first few minutes of the approach are 
probably the most critical of any period in the 
sale. You must be in a position to say some¬ 
thing that will secure attention and create in¬ 
terest. There can be no set statement that will 
make the same impression on every business 
man, but if the salesman has his observation 
faculties properly trained, he will see enough 
in the general appearance, conduct and methods 
used in the business to furnish him with a lead 
as to the proper course to pursue. 

The Interview 

The object of the interview is to create, in 
your prospect’s mind, interest in the proposition 


56 


Punched Hole,Recounting 

you have to offer and get him to make a thor¬ 
ough investigation of the subject of Punched 
Hole Accounting. 

There is one point that a salesman should 
always keep in mind—no matter who the pros¬ 
pect is, he can be seen. There is a way to get to 
him. Never have a feeling of fear when you are 
about to approach a chief executive—a so-called 
“Big Man.” “Big Men” are “Big Men” simply 
because they use and believe in better methods 
of conducting their business. Every business 
man you try to sell also has something to sell. 
He appreciates and respects a good salesman, 
even though he may feel he is not interested in 
your proposition. 

Remember, you have a knowledge of your 
product and its application to your prospect’s 
business, which the person with whom you are 
discussing the subject is not cognizant of. 
Therefore, you are in a favorable position to be 
master of the interview. 

If a salesman enters a place of business and 
has to pass by a secretary, telephone operators, 
or chief clerk, his personal appearance and man¬ 
ner, the way he acts and talks, providing he 
does not allow himself to be “pumped,” will, in 
most cases, secure a hearing. Many salesmen 


57 


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are too willing to spend the biggest part of their 
time waiting to see their prospects. Valuable 
time can be saved and more prestige and respect 
gained from the people in offices if, on asking 
for an interview and finding it cannot be se¬ 
cured promptly, you leave and make another 
. call. 

There is always something a salesman can do 
besides indefinitely waiting if he is denied ad¬ 
mittance to a busy man’s office. An aggressive 
salesman will find some way to bring his busi¬ 
ness to an immediate issue. A salesman’s 
originality must teach him how to handle each 
emergency. One of the difficulties with the 
younger and inexperienced salesman is that he 
allows himself to be overawed by a sense of his 
own insignificance. The hum and rush of busi¬ 
ness confuses him. He feels he is going to be 
denied an interview, and, in his anxiety, explains 
the purpose of his visit to the clerks or telephone 
operator. Sometimes he is informed that there 
is a rule forbidding the admittance of uninvited 
salesmen. Every salesman should remember 
this: Rules of that kind are not made with a 
view of repulsing him personally, or his propo¬ 
sition in particular. They were made to cover 
the rank and file of undesirable solicitors. If 


58 


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you place yourself among the rank and file you 
will probably not be successful in obtaining a 
hearing, but if you feel that your proposition is 
a good one, that the rule doesn’t apply to you 
and that the prospect’s interests are going to be 
best served by seeing you, you will stand a good 
chance of securing your interview. 

Just remember that such rules were made 
only to keep out the masses, and by using your 
sales ability and ingenuity you will find tele¬ 
phone operators, clerks, etc., have no prepared 
regulations or methods for repulsing the per¬ 
sistent, earnest and forceful salesman. Con¬ 
sider yourself in the position of one business 
man calling on another to discuss a proposition 
of mutual advantage, and not in the position of 
a solicitor trying to sell something of question¬ 
able value. Always remember that you can see 
the man you want to see if your nerve holds 
out and you use your brains. 

The Buyer’s Attitude 
Long experience has taught buyers to assume 
an attitude towards salesmen which will work 
to the advantage of the buyer. 

Salesmen should not be confused or surprised 
at gruffness, discourtesy or rebuffs. These are 


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a buyer’s usual weapons and particularly apply 
in the purchase of specialties with which he is 
generally unfamiliar. 

The average buyer of staples knows their 
price and quality, and is just as familiar with 
them as the salesman is. Therefore, the two are 
on an equal footing. But with the average 
specialty salesman, the buyer realizes that he 
is at a disadvantage, knows nothing about the 
goods, their purpose or their price, and in order 
to protect himself must adopt tactics that will 
put him on a more nearly equal basis with the 
salesman. 

Tabulating Machine salesmen should always 
keep in mind the natural advantages which they 
possess in presenting the subject of Tabulating 
Machines, as they not only know their own prod¬ 
uct and the service the machines will render, 
but they have a general knowledge of either the 
prospect’s business or a similar business where 
Tabulating Machines are installed, providing 
they have prepared themselves properly for the 
call, as the industry chart and detailed informa¬ 
tion from the territory in which a customer in 
a similar line of business is located, will supply 
preliminary data of unquestionable value and 
strengthen the approach of the salesman. 


60 


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All business men are interested in better ways 
of conducting their business, and the majority 
are much more interested in Tabulating Ma¬ 
chines than they will at first indicate to the 
salesman. Prospects who, at first, might appear 
to be the toughest cases, many times respond 
to the right treatment surprisingly soon. Don’t 
give up too easily. If you understand your 
business, talk facts, and are able to convince 
your prospect that you have a proposition that 
will save money for him, either through doing 
the same work at a lower cost or supplying more 
information at the same or a slightly higher 
cost, you will have no difficulty in securing at¬ 
tention and interest. 

Avoid Antagonism 

One of the greatest weapons of the experi¬ 
enced buyer is to create antagonism between 
himself and the salesman. Every salesman 
must look out for this and learn how to answer 
antagonistic objections in such a manner as to 
make those very statements clinch a point for 
him. 

Don’t Use Technical Terms 
A weakness which salesmen must guard 
against is the use of technical terms. Remem- 


61 


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ber, the prospect you are interviewing for the 
first time knows nothing about your proposi¬ 
tion. While the words “skip bar,” “Universal 
split,” “automatic control,” etc., are perfectly 
plain to people in the Tabulating Machine busi¬ 
ness and to some users of Tabulating Machines, 
they are not understood by the prospect who 
has not come in contact with the machines. 

The use of technical terms not only confuses 
the prospect but creates a belief in his mind 
that you have something that is very compli¬ 
cated and of little interest to him. 

Be Persistent 

Don’t be a quitter. Never allow yourself to 
think, “This is going to be a tough proposition— 
I don’t believe I can interest this man.” Such 
thoughts weaken the salesman. 

Regardless of the business your prospect 
conducts—whether of a manufacturing, distrib¬ 
uting or service nature, he has need for account¬ 
ing and statistical records. Make up your mind 
that you can and will interest him. Don’t let 
your prospect talk you away from your purpose. 
Very often a salesman will give up at the be¬ 
ginning of an interview, when a little of the 
right kind of persistence would have carried 


62 


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him past the first obstacles and launched him 
well into an interesting discussion of his propo¬ 
sition. 

Feel that from the time you enter a pros¬ 
pect’s office you are going to get on with him. 
Don’t anticipate trouble and don’t look for ob¬ 
jections. Don’t lose your temper. Don’t make 
extravagant statements or sarcastic remarks. 
Don’t belittle the methods or systems that your 
prospect is using. Weaknesses and losses can 
be pointed out diplomatically without belittle- 
ing his methods or causing offense. 

Don’t allow yourself to entertain, for one 
instant, that delusion of the weak salesman that 
anything which ought to be done is impossible 
or that there are some obstacles which cannot 
be overcome. There is always a way to do any¬ 
thing which ought to be done, and it but remains 
for you to find the way. If every salesman 
would analyze the reasons why he fails in his 
interviews, it would not be long before he 
strengthened himself to the point where he 
would turn past failures into successes. 

Controlling the Interview 

Do not do all of the talking yourself. Allow 
your prospect to talk, but control the interview. 


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Controlling the interview means keeping the 
discussion in the proper channels and progres¬ 
sing satisfactorily for your case. 

Give your prospect to understand that you 
have a sincere desire to help him and that you 
are able to do so. Answer his objections and 
questions directly and honestly. Impress upon 
his mind the necessity of investigating a method 
which will locate unsatisfactory or deficient 
conditions in his business and enable him to 
eliminate such factors, thereby permitting him 
to increase his profits. 

Concentrate on a few strong reasons. Many 
salesmen say too much during the interview. 
It is better to concentrate on a few good reasons 
which he will remember, than it is to give him 
a lot of reasons he will forget. 

Method of Questioning 

This business demands that salesmen know 
how to ask questions which will open up situa¬ 
tions but will not create opposition. You should 
not appear inquisitive, but you must be able to 
get facts or you cannot discuss your problem. 
As a general rule, lack of willingness to answer 
questions is a sign of weakness on the part of 
the prospect. 


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Punched Hole Accounting 

Don’t Ask Questions That Suggest Negative 
Answers 

A great deal depends upon the way questions 
are framed and put to a prospect. Don’t ask 
such questions as “Are you busy?”—“I don’t 
suppose you have time to talk to me now?— 
“Could you see me for a few minutes ?”-^“May 
I have a few minutes of your time?”—“Would 
you be interested in Tabulating Machines?” 

Such questions suggest negative replies and 
naturally create in the mind of your prospect 
the unconscious thought that you yourself 
doubt the importance of your proposition and 
really do not expect him to listen. 

The same thing applies in dealing with clerks 
and telephone operators. Many salesmen make 
the mistake of saying to the clerk or telephone 
operator, “May I see Mr. Smith?” Make your 
questions direct: “Will you please tell Mr. 
Smith that Mr. Blank is here to see him?” 

Study Your Prospect 

Understand and respect your prospect’s pe¬ 
culiarities and hobbies. Remember, all men 
like honesty, politeness and sincerity. And 
don’t forget that “familiarity breeds contempt.” 
Business men want facts, and they want them 


65 


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in the simplest and most concise way. Real 
facts, properly presented, cannot be disputed or 
misunderstood. 

The more quickly the salesman can find out 
how the prospect’s mind is working and get 
over on the prospect’s side of the fence, the 
more progress he will make. People are more 
interested in talking about the things they un¬ 
derstand than they are in having the salesman 
talk about things with which they are not fam¬ 
iliar. 

Gain Your Prospect’s Confidence 

All business is done on a basis of confidence. 

Earnestness, forcefulness and a thorough 
knowledge of your business and the conditions 
existing in your prospect’s business will help 
you gain his confidence. Be able to size up your 
man quickly. Pick out the things in his busi¬ 
ness of the most importance to him, and in that 
way you will quickly reach a point of contact. 
If you understand your business thoroughly, 
know your proposition and believe in it, you will 
be able to interest any prospect. Let him thor¬ 
oughly understand that it is his money and his 
business you are talking about and trying to 
protect—not your own. 


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Don’t Talk Yourself Out of an Order 

Sometimes, in our anxiety to interest the 
prospect, we forget that he does not know as 
much about what Tabulating Machines will do 
for him as we do. Many sales are lost because 
the salesman takes up too much of the prospect's 
time discussing non-essential details. Don’t try 
to explain the mechanical construction of the 
machine. Dwell upon the completed reports and 
results which can be obtained through their 
use—SELL RESULTS. 

A salesman must be patient with his prospect, 
give him time to think and be sure that he un¬ 
derstands every point made. Don’t interrupt 
your prospect’s train of thought. Let him tell 
you what is in his mind, and if you will do that 
you will find you can discuss his problems more 
intelligently and meet his objections more 
quickly and more satisfactorily than by trying 
to monopolize the conversation. 

When you have made one point clear, drop it 
and take up another. Two good points, thor¬ 
oughly understood by the prospect, are worth 
ten that he doesn’t understand or believe. We 
must remember—it isn’t what we say that sells 
the prospect, but it is what he believes of what 
we say. 


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Don't Give Imaginary Demonstrations in 
Your Interview 

Do not get into long-drawn-out discussions in 
your interview on the value of “group indica¬ 
tion” or the way Tabulating Machines perform 
certain functions. TALK RESULTS. 

Remember, the object of your approach is to 
create sufficient interest in your prospect’s mind 
so he will either go to your office, if he desires 
a demonstration, or have you take him to a 
present user’s place of business. 

The use of stereopticon slides now permits 
demonstrations in the prospect’s office and is as 
convincing and probably of greater relative 
value than a limited demonstration of the ma¬ 
chines themselves. Demonstrations can, there¬ 
fore, be made readily at the prospect’s office, 
in such cases where you do not succeed in hav¬ 
ing the prospect call at your office or accompany 
you to a user’s place of business. Take the 
demonstrations to your prospect, if he will not 
come to you. 

If the prospect asks you definite questions 
about how Tabulating Machines will do certain 
things, do not evade him. Give him the infor¬ 
mation he desires but say something such as 


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this: “I can show you more plainly with the 
machines how this information can be readily 
secured.” In this way, you are constantly build¬ 
ing up, in the prospect’s mind, a desire to actu¬ 
ally see and make a complete investigation of 
your product. 

As a general rule, when your prospect starts 
asking questions, you have him interested and 
by carefully following the nature of his in¬ 
quiries you can determine the particular class 
of information he is most interested in. After 
determining this the salesman has a natural 
advantage in referring to, but not repeating, 
this class of information. 

Secure a Definite Appointment for a 
Demonstration 

The whole purpose of your approach is to 
create sufficient interest in the mind of your 
prospect so that he desires a thorough demon¬ 
stration and explanation of Tabulating Ma¬ 
chines. If your approach has been properly 
made, you will not have to beg or plead for an 
appointment. Your prospect will realize the 
necessity of having you demonstrate the results 
of machines to him. Don’t be put off by such 
statements as, “The next time I am downtown 


69 


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I will drop in and look your machines over/’ or 
“I'll come in sometime tomorrow or the next 
day,” or “HI come down to see you tomorrow, 
but I can’t state now a definite time.” In the 
majority of cases, these are only buyer’s ex¬ 
cuses, and conclusively prove you have not 
aroused sufficient interest in the mind of your 
prospect to investigate further. If you are un¬ 
able to convince your prospect that it is to his 
interest to have the machines thoroughly dem¬ 
onstrated, either at your office or a user’s, or 
his own place of business through the use of 
st’ereopticon slides, you have certainly not cre¬ 
ated sufficient interest to convince him of the 
advisability of buying. 

Fully realize that you are the salesman and 
the prospect is the buyer, and up to the time 
you are able to make a definite appointment for 
a demonstration, your prospect is in the frame 
of mind where he has not been able to decide 
whether your proposition is of sufficient value 
or importance to him or his business to take 
the time for a demonstration. He will naturally 
try and draw you out through asking such ques¬ 
tions as, “What kind of records do your ma¬ 
chines make?” “How would I use your ma¬ 
chines in my business?” “What is this total 


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printing proposition I read about in your adver¬ 
tising?” “Have you one of your Tabulating 
cards with you ?” etc. If the salesman attempts 
to satisfy the customer’s mind on such points 
as these in his approach he is simply playing 
into his prospect’s hands and lessening his 
chances for the securing of a demonstration 
and an order. As a general rule, the best an¬ 
swer to such questions is: “That is one of the 
reasons why it is necessary for you to see the 
machines—to see not only the kind of statistical 
records they compile, but how quickly, simply 
and accurately they are made.” 

The most conclusive and impressive way to 
satisfy the prospect’s mind on all questions of 
that kind is through an actual demonstration, 
wherever possible or through a stereopticon 
demonstration—and not through a word de¬ 
scription. 

It is a recognized fact that a salesman who 
urges his prospect to a demonstration of his 
product is anxious to prove he is telling the 
truth. If a demonstration preceded the signing 
of every order, crooked selling and careless buy¬ 
ing would be eliminated and there would be 
little, if any, need for the so-called “Blue Sky 
Laws.” 


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The Presentation and Survey 

The quickest, easiest and. best way to sell 
anything is through a demonstration or by the 
presentation of the results which can be se¬ 
cured from the device you are offering. 

Up-to-date selling methods are just as neces¬ 
sary as up-to-date transportation facilities, up- 
to-date office methods or up-to-date factory ma¬ 
chinery and the up-to-date way to sell Tabulat¬ 
ing Machine service is to demonstrate the ma¬ 
chines or present the results which may be ob¬ 
tained from their use in a simple but concise 
and definite manner which the person you are 
talking to can absorb without undue mental 
effort. 

Simplicity in the presentation of Tabulating 
Machine results is essential to success. The re¬ 
sponsibility for the installation of Tabulating 
Machines is most generally detailed to a sub¬ 
ordinate, but the decision to use them usually 
rests with one of the higher executives. You 
have a big subject to sell and it should be made 
just as brief and clear as conditions permit; 
clarity and briefness of presentation will in¬ 
crease the degree of interest which your pros- 


72 


Punched Hole .Accounting . 

pect has and will be in direct relation to his 
understanding of the subject. 

But after you have gained your prospect’s at¬ 
tention, and before you can close the sale, there 
is an intermediate point necessary which is gen¬ 
erally referred to as an investigation or survey. 
A review of your prospect’s methods should 
never be referred to as an investigation or sur¬ 
vey, but rather advise him that in order to de¬ 
termine the best method of procedure for the 
application of machines to his particular busi¬ 
ness, a general review of his present methods 
by you would be of benefit to him, and that 
in order to bring this subject to his atten¬ 
tion in the most simple manner possible you will 
present him with a written report, giving him a 
brief outline of how the machines could be best 
applied to his business. Say to him, “In order 
not to take up any more of your time at the 
present, if you will refer me to your auditor or 
cost accountant, I will acquaint myself with your 
present methods, and return to you later with 
my report, for your information and further 
discussion.” 

Secure the information outlined on the Busi¬ 
ness Survey Form for all of the different head¬ 
ings, whenever possible, in order to make a 


73 


Punched Hole Accounting 


complete survey at one time. This will not only 
give you the entire details for the application 
of machines, but will supply you with invalu¬ 
able information for further extension work and 
additional machine possibilities, as well as en¬ 
able you to make a higher type of prospect call 
in the future in case the order is not obtained 
as the result of the presentation of your report, 
as each call can be made to cover the discussion 
of a specific phase of the operations of the 
prospect’s business. In this way, the element of 
general talk or effort to create interest from the 
statements made by the prospect at the time 
of the call, is eliminated. 

Make it a point to secure the business survey 
data at the first call, or as near the first call 
as possible. When the prospect is ready to sign 
the contract you will then be in a position to 
accept the order and not necessitate its delay 
through a request to make a review, which has 
a tendency to reduce the prospect’s interest and 
require additional effort at a later period to 
again re-sell him to the same degree of interest. 

With a completed Business Survey Form in 
his possession, the salesman will be in a much 
more favorable position to press the closing of 
the order than when this information is lacking, 


74 


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even if only a partial survey may have been 
made, but a complete survey will naturally be 
of greater comparative value. 

After the Survey has been made, a brief type¬ 
written report on the new survey forms sup¬ 
plied for this purpose, should be presented in 
simple and concise, language and should, after 
featuring the machines for the use under con¬ 
sideration, call attention, to the fact that its 
presentation covers only the application of 
Tabulating Machines for the purpose under 
discussion, but that there are other classes of 
work, referring to each, in the prospect’s organi¬ 
zation which can be applied to machines. This 
survey should be delivered in person to the in¬ 
dividual interested and gone over in detail, with 
a verbal elaboration of additional possibilities 
of machines in the prospect’s organization. 
Have your contract forms ready and do not 
hesitate to present them for consideration when 
the survey is presented. Proceed on the basis 
of an expectation of an order rather than a dis¬ 
cussion of the survey and then a recall for fur¬ 
ther consideration, which will materialize into 
another period of prospecting activity before 
the order is finally secured. 

Do not make specific reference in your report 


75 


Punched Hole Accounting 

on the need or cost of new filing equipment or 
other accessories. Small card boxes can be used 
for storing cards, if desired. Filing cabinets 
are naturally desirable, but we do not handle 
them and it is for the prospect to determine 
whether they desire a filing device of this na¬ 
ture. 

In making your demonstration of Tabulating 
Machine service, four methods can be adopted, 
each of which can be made equally effective, al¬ 
though some will create a stronger impression 
in the mind of your prospect than others: 

1. Demonstration of machines in your office 
together with stereopticon illustrations and 
sales talks as outlined in the Sales Manual. This 
method is the best and most desirable, as you 
have the prospect away from his desk and in 
the most favorable environment. The discus¬ 
sion of the application of machines can proceed 
in a manner that is most advantageous to you, 
for there will be no distracting telephone calls 
or interruptions, nor will the prospect’s mind be 
interrupted by subjects which might occur to 
him regarding papers or other matters on his 
desk, if he were in his own office. 

2. Demonstration of machines in a user’s 
office. This method of demonstration has its 


76 


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advantages, as the effect on a prospect in taking 
him to another concern using your machines, 
is highly favorable, as a user who is interested 
in the application of Tabulating Machines will 
voluntarily offer comments and make remarks 
on the service he is securing and the benefits he 
is obtaining from machines, which will be more 
convincing to a prospect than any statement a 
salesman could make. But such demonstrations 
do not generally permit a detailed discussion of 
the application of machines because of detract¬ 
ing influences and conditions which cause the 
prospect to desire to leave as soon as possible 
in order not to impose too much upon the user’s 
time and attention. 

3. Demonstration of machines through report 
forms in the Salesman’s Handbook, together 
with sales talks appearing in the Sales Manual 
for the report, or reports under discussion. This 
type of presentation can be made highly in¬ 
teresting and instructive, and offers many ad¬ 
vantages as it permits making more demonstra¬ 
tions and enables the prospect to call for such 
reports as he may be securing at the present 
time in his own organization, enabling him to 
make comparisons and notes as to the possibility 


77 


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of applying Tabulating Machines to his own 
business. 

4. Demonstration through stereopticon slides, 
together with the corresponding sales talk for 
each slide presented, in accordance with the 
outline contained in the Sales Manual. This is 
a highly favorable means of presenting the sub¬ 
ject of Tabulating Machine service. It not only 
permits the individual to review machines in¬ 
telligently and in a detailed manner, but others 
in the organization who are interested may be 
invited and can at the same time review the pre¬ 
sentation. If there is a possible delay in having 
the prospect visit your office, arrangements 
should be made to take the slides and the stere¬ 
opticon machine direct to his office and pre¬ 
sent the subject there. After its conclusion, no 
time should be lost in arranging for a review 
of their present methods with the Auditor, Ac¬ 
countant or some other individual who can 
supply the desired data, and in rendering a re¬ 
port promptly while the demonstration is still 
fresh in the prospect’s mind. 

How and Why—In Demonstrating 

Remember, the reason for your demonstra¬ 
tion is to prove to your prospect that the appli- 


78 


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cation of Tabulating Machines will benefit him 
in his business. It is not necessary to go into 
a discussion of the mechanical construction of 
the machines. The purpose of your demonstra¬ 
tion is to show how Tabulating Machine service 
will reduce expenses and save money. 

Keep in mind that you must show your pros¬ 
pect how Tabulating Machine service will be of 
value to him, and then support these facts with 
real reasons as to why such results are valuable. 
The thought uppermost in the minds of most 
prospects is, “Why should I install Tabulating 
Machines ?” It is the salesman’s responsibility 
to thoroughly explain WHY through an actual 
demonstration or simple explanation of what 
they will accomplish, supported by the illustra¬ 
tions appearing in the Salesman’s Handbook 
and by the statements in the Sales Manual. 

“Why,” to the salesman, is the most valuable 
word in the English language, because it will 
answer many objections and prevent needless 
argument. During your demonstration the 
prospect will ask questions and advance objec¬ 
tions. Many salesmen attempt to answer an 
objection without knowing the prospect’s real 
reason for advancing it. When you attempt to 
answer an objection, be sure you are answering 
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the objection that is in the prospect’s mind. 
As an example, the prospect brings up the ob¬ 
jection, “I can’t use Tabulating Machines in 
my business.” Instead of telling him why other 
people use them, or getting into long-drawn-out 
arguments as to the advantages of Tabulating 
Machines ask him, “Why can’t you use Tabulat¬ 
ing Machines in your business ?” In his attempt 
to explain his reasons he will, in the majority 
of cases, prove to himself, through the weak¬ 
ness of the very arguments he advances, that 
his objections are unfounded and not supported 
by facts. 

Experience has taught us all that many of 
the ideas we get impress us until we try to ex¬ 
press them, but as soon as we attempt to put 
them into words, they lose their force and do 
not sound logical. Allow your prospect to ex¬ 
press his opinions and advance his objections. 
After you have listened to these, you are in a 
position to convince him, through an actual dem¬ 
onstration, of the unsoundness of his proposi¬ 
tion. Remember, “Specialty Salesmanship is a 
battle of Organized Knowledge against Unor¬ 
ganized Ignorance,” and by asking “Why” to 
your prospect’s different objections, you are 
making him realize that his objections are the 


80 


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result of “unorganized ignorance” and not 
founded on facts. 

If you succeed in getting your prospect to 
your office, or to visit an installation, the former 
being preferable, you have accomplished a very 
important step in the sale. It proves that he is 
interested in Tabulating Machine service, and 
you must now be prepared to make the most 
of your opportunity. 

Respect your prospect’s ignorance of Tabulat¬ 
ing Machines. Remember, he has had no op¬ 
portunity to study them, and his knowledge is 
limited. You must be patient and see that he 
understands the different features. When he 
shows a desire to ask questions or raise objec- 
tions, let him do so and answer each objection 
or question before going to something else. 
Don’t make the fatal mistake of saying, “We 
are coming to that later,” thus giving your 
prospect the impression you are concealing 
something or that he has hit upon something 
you are unable to explain. 

Nothing will create opposition and antagon¬ 
ism more quickly than a seeming disregard for 
the opinions and objections of a prospect. 

Convince your prospect on each point before 
leaving it. Remember, he is interested in know- 


81 


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ing why Tabulating Machines are necessary in 
his business, and not in knowing how they 
operate. 

How to Learn to Demonstrate 

After you have familiarized yourself with the 
method of presentation, you must learn how to 
demonstrate the value of Tabulating Machines. 
This can be accomplished by learning what to 
do and say, and then learning how to do and 
say it. By studying the Sales Manual and appli¬ 
cation of machines you will soon familiarize 
yourself with the method and be able to arrange' 
your points in proper sequence and deliver them 
so that your prospect will thoroughly under¬ 
stand what you are talking about. 

After you have acquired the principles and 
familiarized yourself with the arrangement of 
the various points—when to bring them out and 
how to thoroughly explain them—have one of 
your associates, another salesman or service 
man take the part of the prospect and listen to 
your demonstration. This will enable you to 
perfect yourself in your method and give the 
person to whom you demonstrate an oppor¬ 
tunity to criticise and suggest. 

When a manager and salesman, or two or 


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more salesmen, can get together, much time can 
be saved by demonstrating to each other, one 
acting as the salesman, the other the prospect— 
and then reversing the plan. We may feel many 
times that we know a thing and really do, as far 
as knowledge of it is concerned, but this does 
not mean that we have it well enough arranged 
in our minds to present it or thoroughly explain 
it to some one else, so that they can understand 
it. 

In following this method of learning the dem¬ 
onstration, you are simply following the method 
found most advantageous by public speakers, 
lecturers, lawyers and specialty salesmen. There 
are very few public speakers who do not re¬ 
hearse their speeches several times before de¬ 
livering them. There are few lawyers who do 
not rehearse their plea to the jury. It would 
be impossible for an actor to take his part suffi¬ 
ciently well to please his audience without sev¬ 
eral rehearsals. All you need to do is follow 
what has already been approved as the best 
method. 

In rehearsing your demonstration along the 
above lines, you very quickly familiarize your¬ 
self with what to say and how to say it, and 
develop a poise and familiarity with your sub- 
8,1 


Punched Hole Accounting 


ject which cannot help but be impressive to your 
prospect. You will also find, while learning 
your demonstration that you will acquire a 
strength which eliminates the possibility of a 
prospect leading you away from your subject 
or being able to confuse you by injecting ques¬ 
tions, objections, etc. 

In every demonstration you must be master 
of the situation, and only through study, prac¬ 
tice and rehearsal can you acquire the knowl¬ 
edge and method which will enable you to domi¬ 
nate the situation. 

SPECIAL POINTS TO REMEMBER 

1. Don’t neglect to thoroughly learn your 
presentation and demonstration. 

2. Don’t talk too fast. 

3. Don’t be nervous. 

4. Don’t bluff. 

5. Don’t imagine or suppose anything — 
PROVE IT. 

6. Don’t say one thing and do another, while 
you are demonstrating. 

7. Don’t try to hurry your demonstration. 
Take plenty of time. 

8. Don’t try to make your prospect think 


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that Tabulating Machines will do things they 
will not do. 

9. Don’t make excuses for not knowing your 
business or for not being ready to demonstrate. 

ALWAYS BE READY. 

10. Don’t be afraid of your prospect or doubt 

# 

your ability to sell him. 

11. Don’t leave objections and questions ad¬ 
vanced by your prospect unanswered. 

12. Don’t let your prospect lead you away 
from the point you want to make. Let him talk, 
but bring out your points. 

13. Don’t make extravagant statements or 
promises that you cannot fulfill. 

14. Don’t expect your prospect to buy until 
you have thoroughly convinced him of the need 
for Tabulating Machines. 

15. Don’t say “it can’t be done.” Learn how 
to do it. 

16. Don’t ridicule or belittle your prospect’s 
methods or business routines. 

17. Don’t let other appointments or engage¬ 
ments interfere with your demonstration. 

18. Don’t allow anyone to interrupt you while 
demonstrating. Let all telephone calls, visitors, 


85 


Punched Hole Accounting 

etc., wait until you are finished with your pros¬ 
pect. 

19. Don’t dodge night appointments. They 
are the most profitable kind you can make. 

20. Don’t try to figure out methods to avoid a 
demonstration. Figure out ways to demon¬ 
strate. 

21. Don’t fail to keep appointments for dem¬ 
onstrations. 

22. Don’t forget that present neglect is fu¬ 
ture regret. 

•23. Don’t fail to present your contract at the 
first opportunity. 

24. Don’t lose your nerve. 

25. Don’t be a “quitter.” 

26. Don’t forget that your demonstration is 
the quickest, easiest and best way to secure 
the order. 

27. Don’t beg or plead for your order—EARN 
IT. 

28. Don’t overlook the so-called little things 
in closing. Many little things make one im¬ 
portant big thing. 

29. Don’t misrepresent anything in order to 
secure an order. 

30. Don’t forget that the so-called “knack of 


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Punched Hole Accounting 

closing” comes from study, practice and experi¬ 
ence. 

31. Don’t try be be “slick” or do “smart” 
things—this shakes confidence in you and your 
proposition. 

32. Don’t exagerate the importance of var¬ 
ious things. The truth about Tabulating Ma¬ 
chines is all that it is necessary to sell them. 

33. Don’t use “bird-shot” arguments. Re¬ 
member, one strong argument the prospect be¬ 
lieves is worth ten weak ones he doubts. 

34. Don’t talk yourself out of an order. There 
are two things a salesman must know—one is 
when to talk and the other is when to stop talk¬ 
ing. 

35. Don’t undersell your prospect. 

36. Don’t oversell your prospect. 

37. Never stop studying how to improve your 
method of approach, demonstration and closing. 


Closing The Sale 

After you have completed your survey, you 
must then take advantage of the opportunity 
you have created to secure the order. This is 
the real test of salesmanship. 


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Punched Hole Accounting 

Closing the sale will depend on your ability 
to sum up the points covered and drive home 
real reasons as to how Tabulating Machines will 
accomplish the results you have claimed—and 
to present the order for signature in the proper 
manner. 

The salesman must be able to take up the 
arguments necessary to convince his prospect, 
immediately after he has presented his survey. 

Sum up your strong points—recapitulate. A 
lawyer never depends upon the jury or the court 
remembering the evidence he has introduced. 
After all the evidence is in, he sums up his 
strong points in what, in sales language, is 
called a ‘'closing argument.” A salesman must 
sum up his strong points in a similar way. He 
must dwell on the savings Tabulating Machines 
will make, how they will reduce expenses, aid 
supervision, prevent losses, save money and help 
increase profits. 

Some salesmen try to secure the order before 
they have given sufficient reasons for the pros¬ 
pect to purchase. Give your prospect real rea¬ 
sons for buying. Remember he must justify 
the use of Tabulating Machines in his own 
mind before committing himself. It is not 
enough to say, “You should have this device 


88 


Punched Hole, Accounting 

because it is an up-to-date thing,” or “because 
some other concern uses it,” but you must con¬ 
vince him it is going to be a valuable acquisition 
to his business. Secure the prospect’s admis¬ 
sion that he is convinced that you can accom¬ 
plish the results listed on your report. If there 
are any questions in his mind, let him ask them, 
and be sure to answer them to his entire satis¬ 
faction before going to another point. 

After your prospect has agreed that you have 
proven that Tabulating Machines will accom¬ 
plish the results covered in your interview and 
explanation, consider your sale made, fill out 
the contract and present it with pen to your 
prospect to sign. Don’t make the fatal mistake 
made by so many weak salesmen of asking a 
prospect if he “isn’t ready to buy,” or, “Don’t 
you think you ought to have these machines,” 
or “Don’t you feel that you should give me the 
order now?” or “The Blank Blank Company 
use them, and don’t you think you should use 
them?” 

Such questions only create in the mind of 
your prospect the impression that you really do 
not expect him to sign the contract at this time. 

Remarks of this nature are taken advantage 
of by a shrewd buyer to release himself from 


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tho obligation he feels you have already built 
up. In your interview, your demonstration and 
your sales work, you have constantly been creat¬ 
ing in the mind of your prospect a feeling of 
obligation to buy. Say nothing that will release 
or lessen the full effect of this thought of obli¬ 
gation. Let your prospect understand, after 
you have proven the points you agreed to prove 
at the start of the survey, that you have done 
your part, and in a polite, courteous, but force¬ 
ful manner, indicate to him that you expect him 
to sign the order. 

Remember, all the work you have done in can¬ 
vassing your field, distributing advertising, ap¬ 
proaching and interviewing your prospect and 
making the survey, was to make it possible to 
secure the order. The proper methods of clos¬ 
ing a sale are not difficult to learn. Neither are 
they difficult to apply. They result from a com¬ 
plete knowledge on the part of the salesman of 
his proposition, his ability to thoroughly explain 
the value of his proposition, his ability to an¬ 
swer in a satisfactory and convincing manner all 
the objections advanced by his prospect, and his 
ability to properly present the order for signa¬ 
ture. 

One of two things is going to happen at this 


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time. Either your prospect is going to convince 
you that he does not need Tabulating Machines 
and that there are reasons why he should delay 
the final decision, or you are going to convince 
him, by properly meeting and answering his ob¬ 
jections, that he does need Tabulating Machines 
and needs them now. 

To be master of this situation, you must de¬ 
velop your selling ability. Your knowledge and 
experience has taught you that the installation 
of Tabulating Machine service is the most prof¬ 
itable investment any business man can make. 

You need feel no hesitancy, then, in using 
every fair and legitimate means of forcing your 
prospect to an immediate decision and signing 
of the order. 

Don’t let your prospect put you off with such 
excuses as, “I want to think this over for a few 
days.” Impress upon your prospect the fact 
that he is in a better position now, with the 
knowledge he has fresh in his mind, than he will 
be at a later date. 

The closing of the order is the real test of a 
salesman’s ability. There is no mystery, sub¬ 
terfuge or tricky methods necessary. Knowl¬ 
edge of your business and the advantages of 
Tabulating Machine service to your pros- 


91 


Punched Hole Accounting 

pect; earnestness, forcefulness and enthusiasm, 
backed up with the right kind of closing argu¬ 
ments, will, in the great majority of cases, se¬ 
cure the order, providing you give your prospect 
an opportunity to sign it. 

Many salesmen fail to make sales because 
they wait, hoping for the prospect to volunteer 
some such statement as, “I guess I will buy,” or 
“Make out your order,” instead of having the 
contract ready for signature. 

Remember, the purpose of a closing argument 
is to create an opportunity to present the con¬ 
tract to your prospect for signature. You have 
not really tried to close your sale until you 
have given your prospect an opportunity to sign 
your contract. If you fail to close your sale, 
don’t blame your prospect, your Company or 
your product. The cause of your failure is not 
because Tabulating Machine service will not 
benefit your prospect, but because you have 
failed to prove your case and make him believe 
they will be a real benefit in his business. 

When a prospect says to you, “I don’t believe 
we need Tabulating Machines; we have gotten 
along without them for the past fifteen years,” 
reply to him: “Progress and development neces¬ 
sitate the changing of our views and methods 


92 


Punched Hole Accounting 

by using the profitable improvements offered 
to us by science and invention. It isn’t a matter 
of what you haven’t done—it’s a matter of what 
should be done and what can be done to im¬ 
prove the methods now in use.” 

Say to the prospect that practically every 
modern improvement used in his business to¬ 
day was considered an unnecessary extrava¬ 
gance before he adopted it. 

When a man puts off buying, he rarely gives 
you the real reason for so doing. If possible, 
find out what his reason is. Do not accept such 
excuses as, “My partner will object,” “My busi¬ 
ness will not justify it,” etc. These are not 
reasons, but excuses. If you find out the real 
reason, you can in many cases overcome the 
objection and close the sale. 

Where a prospect exhibits interest, but states 
that he must take the matter up with his 
superiors, the salesman should extend an offer 
and express his willingness to accompany him 
in the presentation of the matter, with the 
simple statement that “I may be able to be of 
assistance to you in explaining this matter to 
Mr. Blank.” Do not be presumptuous, but im¬ 
press upon the person to whom you are talking 
the fact that you want to assist him. Make 
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Punched Hole Accounting 

every effort possible to be present, as the aver¬ 
age individual is not sufficiently informed on 
the possibilities of Tabulating Machines or the 
results they produce to intelligently present 
the subject. The presence of the salesman will 
tend to guard against possible hasty or adverse 
conclusions by the superior, based on a lack of 
knowledge or wrong impressions. 

Further Essentials in Selling Tabulating 
Machine Service 

There are two methods of selling Tabulating 
Machine service. The first is the prospecting 
of territories for the locating of new users 
of Tabulating Machine service; the second is 
the selling of service to present users in order 
to assure the proper application of machines al¬ 
ready installed and extend their use. 

Both classes of selling are important, but in 
order to assure the continued growth and de¬ 
velopment of the business, the constant placing 
of machines with new users is essential. How¬ 
ever, it is equally important that the highest 
degree of sales ability and skill be exercised in 
extending service to present users in order to 
guard against possible changes in methods and 
routines which would tend to decrease the use 


94 


Punched Hole Accounting 

of machines or cause a reversion to manual 
methods for classes of work which could be bet¬ 
ter handled through the application of Tabulat¬ 
ing Machines. 

Therefore, regular and consistent calls should 
be made on present users, at least once a month, 
except in the case of those who are located at 
such distance from the sales office as to make 
the cost of a monthly call prohibitive. In such 
cases customers should be scheduled for regu¬ 
lar calls, but with a greater period of time in¬ 
tervening between visits. Customers located 
at distant points should be kept in touch with 
by letters of inquiry as to the progress they 
are making and possible new applications on 
machines suggested which can be discussed 
further upon the salesman’s next visit, together 
with the advice that if in the interim the cus-’ 
tomer desires additional information on the 
subject, the salesman will be glad to write him 
further. 

In the cases of customers who are located at 
points where they can be called upon once a 
month, such calls should be made without fail, 
and more often where conditions warrant. 

Proper sales effort, in the rendering and sell¬ 
ing of service, is of the utmost importance. 

95 


Punched Hole Accounting 

Special care should be taken to render instruc¬ 
tions on new installations and on the applica¬ 
tion of new uses to machines already installed. 

A salesman should study the customer’s prob¬ 
lem, discuss the proper method of procedure 
and prepare the necessary routines in the ap¬ 
plication of Tabulating Machines, for the cus¬ 
tomer to follow. These factors are of unques¬ 
tioned value and will assist in establishing the 
installation on a solid basis, if given the re¬ 
quired amount of attention. However, this 
will not necessitate the salesman’s constant 
presence at an installation, but frequent visits, 
outlining the next course of procedure for the 
customer to follow, will enable the user to work 
intelligently during the salesman’s absence. 

During the early period of the installation 
salesmen should visit, without fail, new users 
during the first few months when they are pre¬ 
paring to close their work and take off their 
reports, except those located at a distance who 
should be kept in touch with during this period 
by letter, or telephone where conditions war¬ 
rant, in order to be assured that the plans 
which were made are functioning satisfactorily 
and anticipated results are being secured. 

Unsatisfactory installations, likewise, require 


96 


Punched Hole Accounting 


frequent calls and the personal attention of the 
salesman in order to supervise the application 
of the work to machines and regulate its 
proper handling. In such cases, the salesman 
should confer with the executive responsible 
for the Tabulating Machine installation and 
arrange to work with him direct, keeping in 
close touch with the progress of the work, and 
making recommendations for such changes in 
handling the work as are necessary. Frequent 
calls on unsatisfactory installations, even 
though the customer may not express dissatis¬ 
faction, are necessary to assure that essential 
routines and methods are being adhered to and 
properly followed. 

The rendering and selling of Tabulating Ma¬ 
chine service is one of the salesman’s greatest 
responsibilities, and in order to enable him to 
do so on a uniformly high grade basis, the num¬ 
ber of customers assigned to each salesman is 
limited, to permit him to give each customer 
individual attention at all times, and preferred 
attention in cases where conditions warrant. 


97 


Punched Hole Accounting 


Ticketograph Customers Are Future Tabulat¬ 
ing Machine Users 

Ticketograph customers are excellent pros¬ 
pects for Tabulating Machine service, as the 
Ticketograph necessitates service calls just as 
a Tabulating Machine installation does. While 
making these calls on Ticketograph users, a 
salesman can secure considerable knowledge as 
to the customer’s general methods and routines 
and how their accounting and statistical work 
is handled, enabling the salesman to intelligently 
present the possibilities of Tabulating Machines 
on a basis of known requirements. 

A salesman should, therefore, constantly 
study the methods and routines in organiza¬ 
tions using Ticketographs, in order to prepare 
for the presentation of the Tabulating Machine 
method, as the satisfactory use of one device 
supplied by this Company will simplify the pre¬ 
sentation of another machine method which 
offers even greater possibilities for the conser¬ 
vation of profits. The user, having already real¬ 
ized that the Ticketograph supplies an element 
of profit and protection, will naturally be fav¬ 
orably inclined to a discussion of another ma¬ 
chine which will further increase these profits 
along other lines. 


98 


Punched Hole Accounting 

Never Say That Tabulating Machines Cannot 
Be Used 

Tabulating Machine salesmen must exercise 
extreme caution and care never to advise any 
prospect, no matter how small, that they can¬ 
not use Tabulating Machines, due either to their 
size or the fact that machines cannot be applied 
advantageously at the present time to their 
work. 

The small prospect will undoubtedly grow and 
may even develop into an exceedingly large con¬ 
cern, but the mere fact that at some time dur¬ 
ing the period in which that concern was in 
business they were told that they could not 
use Tabulating Machines, establishes an ele¬ 
ment of resistance which would tend to either 
delay or make impossible the installation of ma¬ 
chines at a future date. While they may have 
been advised that, due to the fact that they 
were too small, they could not use machines, the 
qualification would not, in all probability, be 
remembered. The predominant thought would 
be the fact that they had been advised by a 
Tabulating Machine salesman that they could 
not use our equipment. 

Therefore, in such cases where you find that a 


99 


Punched Hole Accounting 

concern is too small to use machines to advan¬ 
tage, special care must be taken not to advise 
them that they cannot do so; rather, inform 
them that they can use machines but that you 
believe it would be to their advantage to delay 
the installation temporarily or until such time 
as a certain portion or class of work (referring 
to the work specifically) increases in volume, 
and that you will keep in touch with them, 
review the amount of work which they are 
handling and inform them at the proper time 
that they can use machines to advantage. 
Never make the statement or express the opin¬ 
ion that they cannot use machines. 

Another case where care must be exercised 
not to advise a prospect that they cannot use 
Tabulating Machines is where the process or 
methods are simple, or details are limited. Such 
concerns may add other lines to their business 
or change their method of procedure and become 
excellent Tabulating Machine prospects at a 
later period. 

In such cases, the salesman should advise the 
user that while the details secured at present 
are rather limited, they could use machines to 
advantage if they were interested in securing 
additional information—specifying the different 


100 


Punched Hole Accounting 

kinds of data which could be supplied by mak¬ 
ing re-distributions and greater analyses of 
their figures, and how such additional details 
could be used and why they would be of value. 

Salesmen, however, should not express their 
opinion, in either case, without first discussing 
the matter with their manager, and taking such 
subjects up at weekly meetings, as each pros¬ 
pect, regardless of the size or kind of business, 
represents a pontential amount of revenue 
which should be guarded and protected to the 
fullest possible extent. A prospect of this na¬ 
ture should not be listed as not being able to 
use Tabulating Machines advantageously until 
every effort has been made to devise plans 
which would warrant their installation. 

Single Distributions 

Another factor which Tabulating Machine 
salesmen must exercise extreme care in handl¬ 
ing is such prospects who make but a single 
distribution of their present operations. 

Do not spend time or effort in trying to de¬ 
vise an advantageous Tabulating Machine sys¬ 
tem on a basis of a single distribution nor ad¬ 
vise a prospective purchaser that they cannot 
use Tabulating Machines advantageously on a 


101 


Punched Hole Accounting 
single distribution, but, rather, analyze the pros¬ 
pect’s business and sell them on a basis of appli¬ 
cation in accordance with the possibilties of ob¬ 
taining analyses pertaining to their business, 
which guard against losses and help to increase 
profits. 

Tabulating Machine salesmanship requires in¬ 
itiative and ingenuity. Where the prospect is 
not securing the full benefit of figure-facts 
about his business, do not attempt to apply 
Tabulating Machines to a deficient system, but 
recommend its improvement so that Tabulat¬ 
ing Machines can be used to advantage. 

Use of Business Survey Forms 

The Business Survey Forms, used by the 
salesmen for securing specific information of a 
prospect’s business, relative to the practicability 
of applying Tabulating Machines, will prove to 
be of unusual assistance in immediately pre¬ 
paring a written report to submit to a pros¬ 
pect, setting forth the value of Tabulating Ma¬ 
chines in his business. 

Salesmen, therefore, should make every pos¬ 
sible effort to secure the information called for 
on these forms upon the first call or as soon 
thereafter as possible. The results obtained 


102 


Punched Hole Accounting 

from these forms will depend entirely upon the 
degree of intelligence exhibited in their use. 

Do not attempt to present this form to the 
prospect and ask him to fill it in or tell him 
that in order to make a review of his present 
methods it is necessary to make a survey and 
secure certain answers to fixed questions. 

After the salesman has been referred to the 
accountant or other individual who will review 
their present methods and systems with him, 
he should state, after a general but limited dis¬ 
cussion, that there are certain basic factors in 
all businesses that indicate the degree of bene¬ 
fit to be secured from Tabulating Machines and, 
in order to simplify the review, a form has been 
prepared, based on our experience, which out¬ 
lines a general series of questions, as to the num¬ 
ber of invoices rendered and other details, which 
it might be advisable to follow. 

Turn over the first page. Do not bother to 
ask for the names of officials or insert the name 
of the Company, or other data—the salesman 
can do that after he leaves the prospect—but 
lay the form before the prospect, immediately 
read the first question and endeavor to secure 
an answer to it. Permit the prospect to see the 


103 


Punched Hole Accounting 


form and note the type of questions that you 
are interested in. 

If the prospect shows any hesitancy about 
replying to the series of inquiries or questions 
the amount of time he has available to answer 
them, suggest that you will take up approxi¬ 
mately a half hour of his time, if agreeable to 
him, and insert such replies as can be completed 
in the time specified. 

At the expiration of the half hour, inquire of 
the prospect if he wishes to continue, as it 
probably will not take much longer to complete 
the list of inquiries, and it will eliminate the 
necessity for any further inroads on his time 
thereafter. As the questions are simple, if the 
matter is properly handled the prospect will 
generally offer no objection. Do not attempt to 
keep the survey form away from your prospect. 
Let him handle it, look at it and read it, but 
dwell on the fact, and repeat the statement, that 
the inquiries are of a general nature, and a 
study of the facts noted on the form will enable 
you to determine the number of cards which he 
will use and the amount of equipment necessary, 
as well as the kind of results which he will ob¬ 
tain through the use of Tabulating Machines 
in his business. 


104 


Punched Hole 'Accounting 

Intelligent use of this form will supply the 
following beneficial results: 

Reduce the number of calls necessary to 
secure an order. 

Permit an intelligent discussion of the 
application of machines, based upon known 
conditions in the prospect’s business. 

Future prospecting efforts are broadened, 
as various phases of the application can be 
discussed, instead of merely one. 

Reports can be made up after the first 
interview, or as soon as the survey form, 
for the use under discussion, has been 
completed, thereby keeping the subject be¬ 
fore the prospect’s attention in a definite 
manner. 

Only one selling job done, as the survey 
is made before the prospect reaches the 
point of ordering. When his interest 
reaches this point, no further delays will 
occur. 


105 









Punched Hole Accounting 

Part II 

The slides, illustrating* the various report 
forms, have an unquestioned advertising value 
and offer an unlimited opportunity for creating 
interest in the minds of business executives as 
well as other members of the organization. 
They permit the presentation of the principles 
of Punched Hole Accounting to students in 
Colleges and Universities, as well as to pupils 
in High Schools and Business Colleges, there¬ 
by educating those individuals who are prepar¬ 
ing for a business career to apply the knowl¬ 
edge gained in their school studies to the po¬ 
sitions they will take after leaving the insti¬ 
tutions of learning they have attended. 

To present the talk and slides most effectively, 
the demonstrations should be thoroughly 
studied, and when conversant with all facts 
covered by every subject, each salesman should 
present the demonstration talk in his own way, 
in order to guard against a sing-song recitation, 
as a lecture or talk of this nature to be effect¬ 
ive, must have the personality of the speaker 
running through the entire address. 

A further use of these slides should be made 
by arranging for a series of lectures or talks, 


107 


Punched Hole Accounting 

illustrated with slides, at Rotary or Kiwanis 
Clubs, Chambers of Commerce, Trade Associa¬ 
tions, etc. 

Do not attempt to show all of the slides at 
any one time. Use only the section of the slides 
pertaining to the subject under discussion, as an 
effort to show them all would preclude the pos¬ 
sibility of discussing the factors of each slide 
which should be referred to in all cases, due to 
the great amount of time required to intelli¬ 
gently present these factors. Divide the slides 
into a series of talks as indicated by the sub¬ 
jects under the index, a number of which may 
be combined, as conditions warrant, and pre¬ 
sented at the same time. 

Arrange for a series of meetings in advance 
and have specified dates reserved for the pre¬ 
sentation and discussion of each subject. 

There is practically no trade organization or 
institution of learning that will not be glad to 
co-operate with you and appreciate securing 
the benefit of an educational service of this na¬ 
ture. 

The illustrated sales talk will, further, be of 
inestimable value in connection with prospect¬ 
ing and customers’ service work. Prospects 
who may question the value of machines, or 


108 


Punched Hole Accounting 


executives who may withhold approval for their 
installation, can be stimulated by arranging a 
meeting at the prospect’s office and exhibiting 
the portion of the slides covering the use of the 
machines which has been featured, whether 
Sales, Material, Labor or any other application. 
In this manner, many prospects or executives 
not having a real knowledge of the benefits to 
be secuerd through the use of Tabulating Ma¬ 
chines will obtain an excellent insight of the 
possibilities which they offer. When using 
slides to demonstrate to the individual pros¬ 
pected, and possibly the executive to whom he 
reports, inquire, where conditions warrant, 
whether or not there are other members in the 
organization interested in the subject whom 
they may' desire to have present. 

Customers who are in an unsatisfactory con¬ 
dition can be stimulated and their interest 
aroused by following a similar procedure. Ex¬ 
ecutives who, because of lack of knowledge, ob¬ 
ject to machines, can be more fully and thor¬ 
oughly acquainted with Tabulating Machine 
possibilities in this manner than in any other 
way, not even excepting a demonstration of 
machines at either the Company’s or a custom¬ 
er’s office. 


109 


Punched Hole Accounting 

Under no conditions are pictures to be shown 
if the salesman is not conversant with the sub¬ 
ject of each slide. Do not attempt to make ar¬ 
bitrary comments or make general small talk 
on the subject of any one slide, as the possibili¬ 
ties of this illustrated sales talk are too great 
to be subjected to abuse of this kind. Do not 
show a slide with the remark, “This is an Idle 
Machine Report,” and the following slide with 
the remark, “This is a Report of Labor Turn¬ 
over.” Presentation of this kind will do more 
harm than good to both the salesman and the 
Company, as well as to the listener. 

It is not our purpose to give these illustrated 
sales talks to customers except where conditions 
warrant, as our users, in most cases, have been 
sufficiently educated to use machines to advant¬ 
age ; but, wherever it is wise to do so, especially 
in cases where a delay is being experienced in 
the adoption of new uses, or where unsatisfac¬ 
tory installations exist, the illustrated lecture 
can be made one of the best and most certain 
means of selling the extension or re-selling the 
user. 

Demonstrations should not be confined to the 
use of stereopticon slides, as they can be made 
equally effective in connection with pictures of 


110 


Punched Hole Accounting 

machines and illustrations of report forms ap¬ 
pearing in the Salesman’s Handbook. The 
demonstrations outlined in the Manual should 
be used in this manner more frequently, due to 
the greater number of calls which can be made 
on prospects and customers than it would be 
possible to make if the slides were shown in 
each case, 'therefore, use your Salesman's 
Handbook in conjunction with the demonstra¬ 
tions outlined in the Sales Manual as they sup¬ 
ply the basis for a complete presentation of the 
use of Tabulating Machines. 

The factors outlined under the demonstra¬ 
tions should not be construed as featuring the 
only elements or details which can be questioned 
on each report. The references made outline 
only a few of the many abnormal factors which 
appear on the various reports, and the ana¬ 
lytical comments have been made to direct the 
attention of the salesman to specific facts, with 
the expectation that the salesman himself will 
continue to analyze the reports, to locate others, 
thereby showing prospects and customers the 
ease with which abnormal factors or elements 
can be located through the use of Electric Tab¬ 
ulating and Accounting Machines. 


ill 


Punched Hole Accounting 

General 

1 - 2 - 3 - 4-5 

The Tabulating Machine Company, subsidiary 
of the International Business Machines Corpo¬ 
ration, is the pioneer in the manufacture and 
application of Tabulating Machines. The 
slides of the various types of machines which 
will be shown, not only illustrate the first Tabu¬ 
lating Machines produced but they indicate, as 
well, the latest achievements in mechanical ac¬ 
counting machines. 

Before proceeding with a brief review of the 
history of the art of Punched Hole Accounting, 
the following pictures of the various plants of 
the International Business Machines Corpora¬ 
tion, covering in excess of eighteen and one-half 
acres of floor space, will acquaint you more fully 
with the company whose products are used the 
world over and whose agencies are located in 
all principal cities. The pictures of the various 
factories show only the plants located in the 
United States and Canada. 

At about the completion of the Tenth United 
States Census ( 1880 ), Doctor Herman Hol¬ 
lerith, an engineer who had won early recogni¬ 
tion as an exceptionally able and accomplished 


112 


Punched Hole Accounting 

statistician, realized the need of mechanical ad¬ 
dition for census tabulation. For this purpose, 
Doctor Hollerith developed a system which re¬ 
corded descriptive data for each individual or 
each unit of inquiry, by punching holes in strips 
of paper and, later, in cards, both of which con¬ 
trolled electric mechanisms, in the form of ac¬ 
counting or adding devices, either singly or in 
desired combinations. The first practical utili¬ 
zation of this machine and the mechanisms de¬ 
vised for its application, was in the tabulation 
of mortality statistics in the City of Baltimore; 
and the machines were also used by the Bureau 
of Vital Statistics of New Jersey and by the 
Board of Health of New York City. 

At the beginning of the organization for the 
Eleventh United States Census (1890), the Su¬ 
perintendent of Census appointed a commission 
of three of the most experienced statisticians in 
the United States to make a practical test of all 
systems of tabulation that might be offered for 
use in connection with that Census. The report 
of this Commission (November 30, 1889), 
showed that three methods were offered in com¬ 
petition and thoroughly tested, the Commission 
reporting that the punching could be done more 
rapidly than by writing on slips, and that tabu- 


113 


Punched Hole Accounting 


lating by machine was approximately eight 
times as rapid as by sorting slips, as well as be¬ 
ing decidedly more accurate. As a result of 
this report, Doctor Hollerith was awarded a con¬ 
tract for furnishing the equipment for tabulat¬ 
ing the returns of the Eleventh Census. 

1900 Census Card 
6 

The following slide will illustrate one of the 
Tabulating Cards used in enumerating the 1900 
Census of Population. 

• The six “fields” to the left of the first vertical 
line are for the identification of the enumera¬ 
tion district. To the right of this line there are 
thirteen fields, some of which are subdivided by 
dotted lines. Starting at the upper left hand 
corner, and proceeding from left to right in the 
upper half of the card, and then from right to 
left in the lower half, the punched holes in this 
card tell the following story: White male; 45 
years of age; married one or more years; for¬ 
eign born; native of England; both parents also 
born in England; has been in the United States 
ten years; naturalized; teacher by profession; 
not employed during any portion of the census 
year; can read, write and speak English, and, 
114 


Punched Hole Accounting 

supposedly, resided in the Thirtieth Enumera¬ 
tion District of the Eighth Supervisor’s District 
of New York, which was located in Ward 8 of 
Albany. 


Original Key Punch 

7-8 

Following is a picture of the Punch used by 
Doctor Hollerith, which you will notice was his 
first venture in Punched Hole Accounting. 

This machine had a perforated board, bearing 
letter or figure characters beside each hole, 
which corresponded with the same information 
appearing on the Tabulating Card. Over this 
key-board swung an index finger whose move¬ 
ment, after the manner of a pantograph, was 
repeated in the rear. In the open" space under¬ 
neath the arm in which a card was inserted, 
there was a split holder or receptacle, resting 
over the bed of the Punch. When the index 
finger was pressed down in any of these holes 
in the front of the Punch, the corresponding 
hole was punched in the card. 


115 


Punched Hole Accounting 

First Population Tabulator 

9-10 

After the cards were punched they were tal¬ 
lied or counted on a Tabulator which was the 
forerunner of our present varied line of Ac¬ 
counting Machines. The cards fed in this ma¬ 
chine by hand were placed on a hard rubber 
bed plate which was provided with suitable 
stops or guides in order to assure them taking 
their proper position. The bed plates were 
formed with a series of holes or cups corres¬ 
ponding in size and number to the holes which 
could be punched in a card. The need of provid¬ 
ing a bed plate with the same number of holes 
as the number that could be punched in a card is 
naturally apparent, as the location of the holes 
in a card would vary for each subject punched; 
therefore, in placing a punched card on the bed 
plate there would always be a corresponding 
hole underneath the card. 

Each hole in the bed was, in reality, in the 
nature of a cup partially filled with mercury 
which, as is generally known, is an electrical 
conductor. These mercury cups were all con¬ 
nected by individual wires with the adding 
mechanism of the Tabulator. Above the bed 


116 


Punched Hole Accounting 

plate was a frame provided with a number of 
projecting* spring*-actuated contact points, as 
illustrated in the next slide, each contact point 
conforming in position with the center of the 
corresponding mercury cup. When a card 
was placed face up on the bed plate the handle 
was brought down by hand and these contact 
points or pins went through the punched holes 
into the mercury filled cups and formed circuits 
corresponding to the digit or location of the hole 
punched in each column on a card. Where no 
holes were punched the pins were merely 
pressed upwards and upon the release of the 
handle, due to the spring actuation they went 
back to their normal position. 

The circuits which were formed wherever the 
cards were punched, as previously described, 
actuated electro magnets which operated count¬ 
ers. To tabulate any of the facts recorded 
on cards, it was only necessary to connect bind¬ 
ing posts for specific counters with the corres¬ 
ponding mercury cup connections, place the 
cards singly on the plate underneath the pin 
box, pull down the handle on the right hand side 
of the machine and the results for each card 
were added to the preceding ones, the accumu¬ 
lated total for all cards showing directly on the 


117 


Punched Hole Accounting 


counter connected. The number of facts thus 
recorded at any one operation was only limited 
by the number of counters used. 

The original Tabulating Machine used by the 
Census Bureau, as indicated by the next picture, 
was supplied with a series of dial counters, add¬ 
ing “one” for each card passing through the 
machine. Each counter on this machine was 
connected with an individual mercury cup for 
a specific class of information, in accordance 
with the location of the hole on the card. 

Each Census Card was complete in itself. 
Amounts or sums were not added on this ma¬ 
chine but a great number of individual classes of 
information was automatically separated into 
groups, dependent upon the location of the holes 
in the card, and accumulated on the various 
counters. 

The speed of this machine was entirely de¬ 
pendent upon the operator and the rapidity 
with which cards were placed on the bed plate 
and the handle pulled down. An average speed 
of approximately 50 or 60 cards per minute was 
considered good. 


118 


Punched Hole Accounting 

First Commercial Tabulator 
11 

But the use of Tabulating Machines on popu¬ 
lation statistics presented the need of other 
mechanical devices for compiling agricultural, 
manufacturing and similar classes of data which 
required the adding of quantities or amounts. 
To accomplish this, a so-called “integrating ma¬ 
chine” was developed, which would accumulate 
or add digits ranging from 1 to 9 in each column, 
the accumulating being determined by the loca¬ 
tion of the hole in the card. This machine, inso¬ 
far as the placing of the cards on the bed plate, 
the pulling down of the handle, the removing of 
the Tabulating Card and the placing thereon of 
a new card, were concerned, followed the same 
method outlined for the Population Tabulator. 
Its operation was, likewise, electrical, but it was 
considerably different in appearance, as indi¬ 
cated by the following picture. 

As a result of the latter type of Tabulator, 
Punched Hole Accounting was adopted in rail¬ 
road, insurance and commercial circles, and has 
since developed into virtually all lines of com¬ 
mercial and industrial activity, including Fed¬ 
eral, State and Municipal Governments. Manu- 


119 


Punched Hole Accounting 


facturing and distributing concerns of national 
and international prominence use the art of 
Punched Hole Accounting for compiling the cost 
of goods manufactured, for distributing their 
overhead and operating expenses, for analyzing 
sales and for determining profits by territories, 
classes of goods, salesmen, agencies, etc. 

In general, the principle of Punched Hole Ac¬ 
counting is represented in practically every in¬ 
dustry and Tabulating Machines are used 
wherever figure-facts are called upon to assist in 
directing the operations of a business. 

The foregoing is a brief but accurate resume 
of the early development of Punched Hole Ac¬ 
counting. We will now proceed with a detailed 
outline of the progress which has been made in 
the further development of Electric Tabulating 
and Accounting Machines and their application. 

Specimens of Basic Tabulating Cards 

12 

The mechanisms presented were those orig¬ 
inally devised for use in the practice of Punched 
Hole Accounting, but the unit which has made 
the operation of these machines both practical 
and successful is shown on the next slide and is 
the commercial Tabulating Card which was orig- 


120 


Punched Hole Accounting 

inally designed for 27 columns on the short 
cards and 37 columns on the long cards, and 
later, in order to increase the capacity of the 
card, the short card was increased to 34 columns 
and the long card to 45 columns. These latter 
cards are still used, the one containing 45 
columns being of greater value on account of 
its almost unlimited capacity to meet all require¬ 
ments. While the number of columns on the 
cards was changed to increase the recording ca¬ 
pacity, the size of the cards, however, remained 
the same. 

Please notice that these cards are still used 
in the same sizes as originally adopted, indicat¬ 
ing how well and on what a solid foundation oi 
reason Doctor Hollerith’s early work was based, 
as after years of practical experience we are still 
using the same size cards that were used in the 
early days with the hand machines when there 
were no precedents to follow and practice was 
built, step by step, in establishing the principle 
of Punched Hole Accounting. 


12L 


Punched Hole Accounting 

Preparation of and Recording Facts on 
Tabulating Cards 

13 - 14-15 

The art of Punched Hole Accounting is a 
notable scientific achievement. We all appre¬ 
ciate the flexibility of figures and the unlimited 
possibilities which the combination of numerals 
permits. These figure-facts, regardless of the 
size of the business, the nature of the industry 
or the kind of information, can be recorded in 
such detail as to permit securing an almost un¬ 
limited amount of different kinds of data per¬ 
taining to the same transaction from a card con¬ 
taining either 34 or 45 columns. 

The principle of Punched Hole Accounting 
and the use of Tabulating Machines is based on 
transposing all written information into nu¬ 
merals—man, department, commodity, branch 
office, territory, customer and all other data 
to be recorded, is given a number which is 
punched on the card and represents the written 
information. 

The corners on the cards are cut as a 
means of indicating their position. Any one of 
the four corners can be cut. Where a number 
of different card forms are used in the same 


122 


Punched Hole Accounting 

organization, for securing various classes of 
data, different corners are cut, the protrusion of 
the corner showing that a card has been incor¬ 
rectly included with other records; or if a card 
is turned upside down, the corner of the card 
will, likewise, protrude and immediately indi¬ 
cate its wrong position. 

The size of card generally used in all busi¬ 
nesses is the one consisting of 45 columns. The 
card is designed by merely drawing a vertical 
line between a row or number of rows of figures 
printed on the card; thus, the figures included 
between each series of vertical lines form a 
field. 

The following illustration will show the first 
steps in designing a Tabulating Card. A line 
drawn between the first and second rows of 
digits on the left hand side of the card gives 
us one field of 12 recording positions for indi¬ 
cating the 12 months of the year. These posi¬ 
tions have been referred to as recording posi¬ 
tions, to differentiate from the adding fields on 
a card, as there are 12 recording positions and 
9 adding positions, excluding zero, on a Tabul¬ 
ating Card. By drawing a line between the 
third and fourth rows of digits we have another 
field, consisting of two rows of figures, which 


123 


Punched Hole Accounting 


can be used for indicating the 31 days of the 
month. This same process can be continued 
for recording other data, such as year, order 
number, salesman’s number, territory, branch, 
class of material, quantity, cost, selling price, 
etc., as will be noted in some of the card forms 
illustrated hereafter. 

The act of drawing a vertical line, therefore, 
automatically transforms a plain card with 45 
columns of figures into an accounting record 
of unusual flexibility. Its accuracy cannot be 
questioned, as a hole once punched is not sub¬ 
ject to transposition or change, which is possible 
where figures are recorded or listed manually. 

Furthermore, a record of this kind permits 
the storing of information for either monthly, 
quarterly or possible future use. The punch¬ 
ing operation is quickly acquired and the rapid¬ 
ity of recording facts through the use of 
punched holes permits the accumulation of all 
data for each transaction in an economical man¬ 
ner. 

The following picture illustrates a card, of 
the same size and with the same number of 
columns as the partially ruled card previously 
shown, which was designed to record the sales 
transactions of a business. The design of Tab- 


124 


Punched Hole Accounting 

ulating Cards varies in accordance with the re¬ 
quirements of each business. Some sales cards 
may require more space for recording quantity 
or amount than others. Other businesses may 
have more salesmen, requiring additional space 
in order to secure sufficient numerals for sales¬ 
men. But from these cards, regardless of the 
nature or kind of business, a report can be se¬ 
cured showing the sales of each commodity or 
group of materials at both cost and selling 
price, permitting a monthly statement of gross 
profits by classes of material. 

After the cards have fulfilled their purpose 
for this report, they can be re-sorted to secure 
sales by salesmen, showing the total sales and 
cost of goods, the difference indicating gross 
profits by salesmen. A further statement of sales 
by salesmen can be secured, showing the prin¬ 
cipal classes of material sold by each salesman 
and the profits earned on each, after which the 
cards can be re-sorted and a statement of sales 
by customers, either in total or by classes of 
material obtained. 

Another sorting of these same cards will sup¬ 
ply a statement of sales by geographical terri¬ 
tories, either separately, by States, Counties 
and Towns, or combined. 


125 


Punched Hole Accounting 

A further analysis can be made to show the 
kind of goods sold, by geographical divisions, or 
a statement of profits realized from the sales 
made in a given geographical division can be 
readily secured from these same cards. An 
analysis of the selling expenses by the same geo¬ 
graphical divisions will readily illustrate the 
amount of profits earned geographically, indi¬ 
cating the low-profit or loss-producing sections 
and localities. 

Another re-sort will supply further figures, 
showing the business done by different agencies 
or branches of an organization. A further an¬ 
alysis will indicate the kind of goods sold by 
each branch, and, if desired, the quantity can be 
secured and the amount of gross profits earned, 
either in total or by classes of goods. 

Written data, as indicated on the next slide, 
and, in general, all classes of statistics, re¬ 
gardless of their nature or character, can be 
recorded on Tabulating Cards, and a con¬ 
stant re-analysis or breaking down of ac¬ 
counts into sub-divisions continued almost in¬ 
definitely, permitting a study of Operating con¬ 
ditions, whether for manufacturing or selling, 
thereby securing analyses and re-analyses of the 


126 


Punched Hole Accounting 

same figures from different viewpoints, indicat¬ 
ing the unlimited flexibility which science has 
made possible through the combination of elec¬ 
tric mechanisms and punched cards. 

Individualizing Tabulating Cards 

16-17-18 

Tabulating Cards are supplied in the range 
of colors as indicated by the next slide, in order 
to differentiate between classes of statisti¬ 
cal records. For illustration, a Manila card 
is generally used for analyzing sales debits, but 
a card of different coior is used for sales credits; 
or color striped cards can be supplied for this 
same purpose. 

This latter method of individualizing records 
is comparatively new and, as will be noted in 
the next slide, a greater range of indicating 
colors can be obtained by the striped color 
method. In such cases where conditions neces¬ 
sitate a still greater range, striped colors can be 
supplied in conjunction with colored cards, but 
care must naturally be exercised in such cases 
to secure contrasts, as a green stripe on a green 
card, while the color is slightly different in both 
cases, would not supply a sufficiently strong 
contrast to be of practical value. The following 


127 


Punched Hole Accounting 


slide will indicate, in general, the results secured 
from striping solid tinted stock with a different 
color. 


Stop Card 

19 

The Electric Tabulator, which will be 
shown later, stops between each group or class 
of information, through the use of a stop card, 
as illustrated by the next slide. Stop cards can 
be used repeatedly, as they merely serve to stop 
the operation of the machine while the informa¬ 
tion appearing on the counters is recorded. 
They may be inserted either by hand or in such 
cases where the same class of information is 
tabulated at specific periods, such as compiling 
a payroll, where the majority of the same work¬ 
ers appear on the payroll each week, stop cards 
can be punched for man number in the same 
corresponding position as the data appears on 
the Tabulating Card. In this manner, stop 
cards, instead of being inserted by hand, can be 
sorted into their proper position through the use 
of the Sorting Machine. The card, as you will 
note, is blank and is merely in the nature of a 
separating card for dividing data into proper re¬ 
spective classes or groups. 


128 


Punched Hole Accounting 

Index Stop Card 

20 

The next slide will indicate the index stop 
card, which is used as an index card where a 
permanent division of records is made, as well 
as functioning- as a stop card to stop the ma¬ 
chine at the end of a class or group of cards. 

The index stop card, appearing before you, 
can also be used for recording various classes 
of information of a permanent nature, such as 
summary cards of plant, showing the total 
amount of plant or equipment in a department 
or the investment in a specific class of machines 
as indicated by a tabulation of plant items main¬ 
tained on Tabulating Cards, a separate Tabulat¬ 
ing Card being used for each machine, specify¬ 
ing the date of purchase, amount paid, depart¬ 
ment, grouping or general class in which the ma¬ 
chine is included, rate of depreciation and 
monthly and annual amount of depreciation. 
The figures appearing on the index card for the 
group in question are changed with the addition 
or withdrawal of a Tabulating Card, represent¬ 
ing the purchase or disposal of machinery or 
equipment. Plant inventories can be readily 
checked and depreciation reserves verified by 


129 


Punched Hole Accounting 


Electric Tabulating and Accounting Machines, 
when plant records are maintained on Tabulat¬ 
ing Cards. 

Present Punching Mechanisms 

The following slides will illustrate the various 
types of Punches in use at present. These 
Punches are similar and, as will be noted, have 
a limited number of keys. The knowledge and 
skill to properly operate them can be readily 
acquired, with but a limited period of training, 
by either male or female operators. 

Key Punch 

21-22-23 

The first slide will illustrate a manually oper¬ 
ated Punch, the depression of a key resulting in 
the punching of a hole in a card, as well as caus¬ 
ing the card to move forward to the next punch¬ 
ing position, both operations being performed 
mechanically. 

Electric Key Punch 

24 

The latest Key Punch, in which electricity has 
again been called upon to supply the operating 
power, will be presented next. This Punch is 


130 


Punched Hole Accounting 

electrically operated and increases the output* 
dependent upon the type of the operator, on an 
average of from ten to twenty per cent, over 
the type of Punch previously shown. The Elec¬ 
tric Punch requires merely a slight depression 
of the key. The electric current pulls down 
the key, the hole is punched, the key is released 
and the card moves forward to the next punch¬ 
ing position. 

Electric Duplicating Key Punch 

25 

The picture appearing before you shows a 
combined unit and Duplicating Punch, operated 
electrically. This device can be used as an in¬ 
dividual Card Punch, for punching cards singly, 
or it can be used for duplicate punching. In 
such instances where either the whole or only 
a part of the punching is to be duplicated, 
a card is inserted in the rear carrier, with the 
information recorded which is common to a 
number of cards and the machine automatically 
punches holes in the proper position on separ¬ 
ate cards, in accordance with the perforations 
appearing on the master card inserted in the 
rear carrier. 

The punched records which are to be dupli- 


131 


Punched Hole Accounting 


cated may either follow in sequence or may be 
separated, by individual data which applies to 
but one card only, the duplicated information 
appearing in various but uniform fields on each 
card. When the fields in a card, which are to 
be duplicated, have been punched, the Punch 
automatically stops and specific information per¬ 
taining to a section of the card, for a certain 
transaction, is punched by operating the keys in 
the regular manner. 

The Punch has a self-feeding mechanism and 
automatically positions the cards which are to 
be punched, when the card carrier is placed in 
punching position. The duplicating of perfora¬ 
tions is based entirely upon the holes in the mas¬ 
ter card in the rear rack, which assures abso¬ 
lute accuracy and uniformity of the punched 
information common to all cards. 

Verification Key Punch 

26 

The Verification Punch operates in a manner 
similar to that of the Key Punch, but as its 
name signifies, it verifies the accuracy of key 
punching. 

After cards have been perforated, the punch¬ 
ing is verified by merely inserting the punched 


132 


Punched Hole Accounting 

card in the Verification Punch in the same man¬ 
ner as was done when the cards were originally 
punched. The verification consists of the oper¬ 
ator depressing the corresponding keys on the 
Verifier for the information appearing on the 
records from which the cards were originally 
punched. If the original punching is correct, 
the carriage and card will move forward to the 
next punching position in the same manner as 
was done when the card was originally perfor¬ 
ated. But if the card is incorrectly punched, or 
if a wrong key is depressed on the Verifier, the 
card and carriage remain stationary. 

The Verification Punch, however, is not gen¬ 
erally used, as the Punch operators become so 
proficient that punching is accurate and any 
possible errors can be readily located through 
the use of control figures for the various classes 
of statistics compiled. Controls can be used for 
assuring the accuracy of man number, depart¬ 
ment, branch or for any other recording or in¬ 
dicative data, in conjunction with Electric Tab¬ 
ulating and Accounting Machines, just as suc¬ 
cessfully as amounts are controlled, as the 
recording data appearing on Tabulating Cards is 
merely accumulated on the Tabulating Machine 
in the same manner as quantities and amounts 


133 


Punched Hole Accounting 


are accumulated, and the total appearing on the 
counter for the accumulated digits for “man 
number,” if this is the information which is be¬ 
ing controlled, will, if correct, agree with the 
adding machine figure representing the total 
accumulation of “man number” which was ob¬ 
tained from the same record from which the 
cards were punched. 

Gang Punch 

27 

The next picture will illustrate the Gang 
Punch, which is used to punch information that 
is uniform to a series of cards. As many as nine 
or ten cards can be punched at one time, in ten 
columns, simultaneously. 

The punching mechanism is regulated by the 
keys appearing above the Punch, and after the 
information which it is desired to punch has 
been determined and the Punch has been ad¬ 
justed, it requires no further attention, the 
cards merely being inserted and the handle on 
the left hand side pulled forward for each lot 
of cards inserted. 


134 


Punched Hole Accounting 

Electric Sorting Machine 
28-29-30-31-32-33-34 

Adding mechanisms and accumulating devices 
were being constantly improved, but the sorting 
of information or the segregating of data into 
groups or classifications was still being done by 
hand, the usual method of procedure being the 
use of a long, old-fashioned steel knitting needle, 
the sorting clerk working in front of a series of 
pigeon holes and sorting out the units column, 
from 0 to 9, for a specific class of information. 
After all of the cards had been sorted by units 
they were taken out of the racks in numerical 
sequence, the cards with zero punched being on 
top, after which they were again isorted for the 
tens column in the manner previously outlined— 
this procedure being followed until all of the col¬ 
umns appearing in the field had been sorted, the 
proper handling of the cards automatically re¬ 
sulting in all of the same number being brought 
together, the lowest number on top, the next 
highest following in proper order and the high¬ 
est number being at the bottom of the pack. 

However, while a Sorting Machine or device 
had been used in connection with Census and 
Vital Statistical Tabulation, the use of the Elec- 


135 


Punched Hole Accounting 


trie Sorter had not been extended, but in 1903 
the need of a machine for commercial use, which 
would arrange records numerically, was felt, and 
science again was called upon to assist in devis¬ 
ing the principle which has been used continu¬ 
ously since its adoption. This machine, which is 
illustrated in the next picture, was the first of 
this type of sorting mechanism invented and, as 
will be noted, was horizontal. But as cubic feet 
of a building are less expensive than square feet 
of floor space, the present vertical type of Elec¬ 
tric Sorter, illustrated on the next slide, was 
adopted and has been used continuously since. 
It operates at the incredible speed of from 250 
to 270 cards per minute, arranging all records 
numerically, no matter in what condition or 
erratic order, so that when they finally emerge 
from this machine, regardless of the number 
of cards in question, they are in numerical se¬ 
quence. 

The rapidity with which the Electric Sorter 
segregates records is due to the unusual type of 
its mechanism, combined with the use of elec¬ 
tricity, as illustrated in a limited manner by the 
following slides. 


186 


Punched Hole Accounting 

Tabulating Card Sorting Tray 

35 

The next picture will illustrate the Sorting- 
Tray, which is used in conjunction with the 
Sorter and supplies storage space for cards 
which are being arranged in proper numerical 
sequence. As the pockets or receptacles of the 
Sorting Machine are filled, the cards are re¬ 
moved and placed in these sections which are 
arranged in the same order as are the pockets 
of the Sorting Machine. 

Electric Tabulating Machine 

36-37-38-39-40-41-42-43 

The progress in Electric Tabulating Machines, 
indicates that the art of Punched Hole Account¬ 
ing was not a hastily conceived or adopted plan 
for an electrical machine during a period when 
electricity was still in its infancy, but that the 
use of electricity, as applied by Doctor Hollerith, 
was based on science. This is verified by the 
fact that even with all of the improvements 
and the many refinements of the new ma¬ 
chines which operate automatically, electricity 
is still the basic principle of operation, as it was 
in the first machine, testifying to the fact that 
137 


Punched Hole Accounting 

the early work of scientific research and inven- 
tion was well done and that the foundation of 
the art of Punched Hole Accounting in connec¬ 
tion with electricity, was well laid. 

Our next step in the development of the art 
was the Integrating or Electric Tabulator, 
which is still largely in use, although refined and 
improved, in accordance with the following pic¬ 
ture. This machine eliminates the feeding of 
cards by hand as was necessary in the early 
models. It is equipped with an automatic feed, 
the cards being fed between rollers and tabu¬ 
lated in their progress, without stopping, doing 
away, likewise, with the necessity of pulling 
down the handle containing the pin box in order 
to make the contact, the contact on the machine 
appearing before you being made with a series 
of brushes, and as the card passes between the 
rollers the brushes make an electrical contact 
wherever a hole is punched in a card. 

This machine proved to be a great advance 
over the preceding type which had initiated the 
principle of Punched Hole Accounting, but it 
was still necessary to re-set the counters by 
hand at the end of the tabulation of a group of 
cards, as was done on the first model. 


138 


Punched Hole Accounting 

The next major refinement on this machine 
was the adoption of the automatic re-set, where¬ 
by, instead of turning a crank by hand, the 
counters were cleared at the end of each tabul¬ 
ation and made ready to accumulate a new set of 
figures or statistics by the mere pressure of a 
button. 

The machine appearing before you operates 
at the rate of 150 cards per minute. Its speed 
is not dependent upon the operator, as was its 
forerunner, and it supplies from one to five col¬ 
umns of accumulated data at the rate of 150 
amounts in each column or counter or adds 750 
amounts every minute. The almost unlimited 
capacity of this machine is readily apparent 
when it is realized that 9,000 figures in one 
column, or 45,000 figures in five columns of 
eight digits each, can be added every hour. 

The following slides will no doubt prove to be 
of interest in illustrating a few of the operating 
parts of the Electric Tabulator. The grade of 
workmanship and manufacturing requirements 
are not exceeded in any other piece of automatic 
machinery. The functioning of this machine is 
so unusual that it would be impossible to ade¬ 
quately explain the many apparently impossible 
things it performs, which, however, is made pos- 


139 


Punched Hole Accounting 


sibje through the mechanical construction of the 
machine coupled with the use of electricity. 

Use of Electric Tabulating and Accounting 
Machines by Governments 
44 

Electric Tabulating and Accounting Machines 
are represented in virtually all lines of business, 
including Federal, State and Municipal Govern¬ 
ments. Foreign Governments, in various sec¬ 
tions of the world, are also users of these ma¬ 
chines for, regardless of the language spoken, 
they render the same universal service to all 
nations. 

Electric Tabulating and Accounting Machines 
performed an important and highly valuable 
service during the World War. The conserva¬ 
tion of man-power, through the use of these 
labor-saving, man-saving machines, was fully 
recognized and their value was realized by the 
Government not only for use by Federal Depart¬ 
ments but to meet the requirements of industry, 
as well, in supplying the essentials of war, and 
they, accordingly, were given a priority rating 
by the Priorities Division of the War Industries 
Board. 

The United States Manufacturing and Agri- 


140 


Punched Hole Accounting 

cultural Census, enumerated in 1920, was com¬ 
piled through the use of Electric Tabulating and 
Accounting Machines. The Agricultural compila¬ 
tion alone required the use of 148,000,000 cards. 
These cards were used repeatedly to supply an 
almost unlimited number of different classes of 
statistics which necessitated their arrangement 
in various groupings, and the sorting and re¬ 
sorting was equal to one billion, forty-five mil¬ 
lion cards, or if the total cards passing through 
the Sorters were placed end to end they would 
be equal to 121,000 miles in length, or almost 
five times the circumference of the earth. 

The great importance of the Agricultural Sta¬ 
tistics compiled by the Census Bureau can be 
readily appreciated when it is realized that we 
depend on our farm and agricultural pursuits 
for the essentials of life, consisting of food and 
wearing apparel. If the materials supplying 
either show a tendency to decline, or acreage for 
any one crop is materially decreased, it is of the 
utmost importance that this condition be 
known. The following will give a very brief out¬ 
line of how the Government protects its people 
and assures them an adequate supply of food¬ 
stuffs and other necessities, determining, as 
well, the excess available for export. 


141 


Punched Hole Accounting 

A separate report is secured for every farm 
in the United States, furnishing a vast amount 
of information. From this report, cards are 
punched and segregated repeatedly and various 
classes of data secured, indicating the following: 

Number of farms, by acreage size; amount of 
livestock, by States, showing the number and 
value of horses, cattle, pigs, sheep and other 
animals, together with a separate analysis of 
pure bred animals; amount of poultry on farms; 
value of dairy products, honey and wax; tons of 
hay; bales of cotton; bushels of potatoes, apples, 
corn, wheat, buckwheat, beans, peanuts and 
other crops, including tobacco; gallons of maple 
syrup, together with number of trees tapped; 
tons of sugar beets and sugar cane; quarts of 
raspberries, strawberries, cranberries; value of 
vegetables produced; number of walnut, almond 
and other nut trees, divided between bearing 
and non-bearing age, and pounds of production. 

The classes of statistics enumerated are but 
a small part of those compiled by the Govern¬ 
ment, showing the value of food produced by 
our farms. However, the items referred to are 
sufficient to indicate the almost unlimited range 
of subjects classified, analyzed and tabulated 


142 


Punched Hole Accounting 

through the use of Electric Tabulating and Ac¬ 
counting Machines. 

The work of tabulating this information was 
equal to the use of two hundred and sixty-nine 
million cards, or, again, if placed end to end, 
these cards would measure in excess of 31,000 
miles, or approximately ten times the distance 
from New York to San Francisco. 

Due to the great capacity and speed of Elec¬ 
tric Tabulating and Accounting Machines, the 
preparation of these figures required the use of 
but 576 Punches, 18 Gang Punches, 58 Tabulat¬ 
ors and 69 Sorters, a comparatively small num¬ 
ber of machines considering the volume of work 
which was handled, there being more than a 
billion cards sorted and over a quarter of a bil¬ 
lion cards tabulated. 

The compilation of statistics covering the 
Fourteenth Census was probably the greatest 
statistical gathering operation in the history of 
the world, and there was approximately from 
fifteen to twenty per cent, more data com¬ 
piled than was obtained from any previous 
census. The use of Electric Tabulating Ma¬ 
chines made it possible to publish these figures 


143 


Punched Hole Accounting 


at a saving of approximately six months in time 
and one hundred and fifty thousand dollars. 

Following are several slides showing Electric 
Tabulating and Accounting Machines used in 
compiling the Agricultural and Manufacturing 
Census. The figures mentioned merely refer to 
the Agricultural Census. The Census of Manu¬ 
facturers also showed a great saving and was 
completed at a cost of $250,000.00 less than the 
appropriation. 

The use of Electric Tabulating and Account¬ 
ing Machines, however, is not limited to specific 
periods when statistics are compiled, but they 
are in constant use in various departments of 
the Government. The United States Post Office 
Department uses Electric Tabulating and Ac¬ 
counting Machines in its Money Order Account¬ 
ing Division. In addition to saving approxim¬ 
ately 350 clerks and reducing the cost of audit¬ 
ing the Money Order Accounts fully 50%, the 
audit is also made quicker and more accurately. 
The Post Office Department has stated that the 
use of these machines and the service rendered 
have effected an economy of over $5,000,000.00 
in eleven years use of these machines in the 
Money Order Accounting Division alone. 

Electric Tabulating and Accounting Machines 


144 


Punched Hole Accounting 

filled an important requirement during the re¬ 
cent World War through their use by the United 
States Department of Agriculture in connection 
with the war emergency food surveys and in¬ 
vestigations of the United States, conducted by 
this Bureau in the preparation of Cold Storage 
and Production Reports issued on various com¬ 
modities relating to the nation’s supply of food, 
food material, etc. The results supplied by the 
machines were furnished to the public, showing 
the shortage of foods and the fact that conser¬ 
vation was necessary. The Tabulating equip¬ 
ment used for this work consisted of 87 Punches, 
11 Tabulators and 16 Sorters. 

The War Department, Office of the Surgeon- 
General, U. S. Army, used Tabulating Machines 
to analyze hospital records, physical condition 
of drafted men and all other statistics relating 
to the forces in the United States during the 
World War. Another installation was made in 
France and supervised by an ex-member of the 
Tabulating Machine Company force of salesmen. 
The equipment used in Washington consisted of 
30 Punches, 7 Tabulators and 9 Sorters. There 
now exists, in book form, one of the most com¬ 
plete records of the Armed Forces of the United 
States that has ever been compiled, which was 


145 


Punched Hole Accounting 

prepared through the use of Electric Tabulat¬ 
ing and Accounting Machines. 

The War Trade BoarcLused machines to check 
shipments made to foreign countries. Permits 
were issued to shippers after they had been ap¬ 
proved by the Board and duplicate copies were 
sent to the Tabulating Division where they 
were punched and tabulated by commodities, 
countries and zones. Electric Tabulating and 
Accounting Machines were used in compiling ex¬ 
port and import information for all departments 
of our Government. The compilation of this 
data necessitated the use of equipment consist¬ 
ing of from 50 to 75 Punches, 8 Tabulators and 
10 Sorters. 

The United States Fuel Administration used 
Electric Tabulating and Accounting Machines to 
record the consumption of coal by each class of 
manufacture. The stock of coal on hand and total 
consumption was compiled for over 70,000 firms 
each week and subsequent allotments of coal 
were controlled by this tabulation, which re¬ 
quired the use of 35 Punches, 8 Tabulators and 
7 Sorters. The records compiled are still being 
used by the Government in making studies and 
in case of war would be available. 

The United States Food Administration used 


146 


Punched Hole Accounting 

Electric Tabulating Machines during the World 
War for compiling statements from reports sub¬ 
mitted by licensed food manufacturers and 
dealers which were reduced to the punched card 
basis and hundreds of tabulations compiled. The 
production of certain classes of foods was neg¬ 
lected until Tabulating Machines entered the 
field and pointed out the fact. About 150,000 
reports were covered each month. In some 
instances as many as 300 items were tabulated 
from a single report. It would have been impos¬ 
sible to do this great job with promptness with¬ 
out the use of approximately the 75 Punches, 
7 Tabulators and 9 Sorters which comprised 
this installation, as quick information was vital 
during those days. 

The War Department, Signal Corps, used ma¬ 
chines to furnish records of all materials pur¬ 
chased by the Signal Corps. These records gave 
a complete history of the order from the time 
of receipt until the shipment, showing the 
article ordered, firm placed with, goods in¬ 
spected, packed and shipped. The equipment 
consisted of 8 Punches, 2 Tabulators and 2 Sort¬ 
ers. 

The War Department, Motor Transport Corps, 
used machines to keep records of all cars owned 
147 


Punched Hole Accounting 


by the Motor Truck Corps, showing description 
of car with all details. Inventories for each 
post were checked monthly and all transfers 
were recorded on the cards. The maintaining 
of these records required the use of 8 Punches, 
1 Tabulator and 1 Sorter. 

The United States Navy Department use Tab¬ 
ulating Machines in various of our Navy Yards. 
The great mass of figures involved in the prepa¬ 
ration of financial statements and the analy¬ 
sis of expenditures would entail an almost im¬ 
possible task without the use of these machines, 
and it is estimated that they effect a reduction 
of 50% in the cost of obtaining necessary infor¬ 
mation covering detailed operation costs of re¬ 
pair work in Navy Yards. 

As previously stated, however, these ma¬ 
chines, while being called upon to render an im¬ 
portant service during the World War, are still 
used by the Government for various statistical 
requirements in different departments and their 
unlimited range and flexibility has been recog¬ 
nized and their use adopted by foreign Govern¬ 
ments in connection with census requirements 
and other branches of Government work. 


14a 


Punched Hole Accounting 

Pioneers In Use of Tabulating Machines 

45 

One of the large businesses which recognized 
the value of Punched Hole Accounting while it 
was in its infancy, were the Insurance Com¬ 
panies, whose statistical problems would be al¬ 
most insurmountable without mechanical assis¬ 
tance. As a consequence, every branch of the 
insurance field is a user of Electric Tabulating 
and Accounting Machines. The Life Insurance 
Companies were the first to adopt them, but 
the Fire Insurance Companies realized their 
value at almost as early a date, after which the 
various other branches of the Insurance busi¬ 
ness applied these machines to their statistical 
requirements. 

One of the early tests to which Electric Tabu¬ 
lating Machines were put by the Life Insurance 
Companies who contributed to the Actuarial 
Society of America, was a tabulation of the ex¬ 
periences of the foremost Life Insurance Com¬ 
panies of North America and led to the revision 
of the height and weight tables that had been 
used before that time. In general, Insurance 
Companies of every kind base their rates on 
their experience and Electric Tabulating and Ac- 


149 


Punched Hole Accounting 


counting Machines have been adopted in their 
accounting and statistical work for analyzing 
Insurance Written, Cancellations, Re-insurance 
Cancellations and many other uses too numer¬ 
ous to mention. 

But there were, likewise, many concerns in 
commercial and manufacturing lines who were 
attracted by the principle of Punched Hole Ac¬ 
counting and utilized these machines in order to 
secure statistical data which it would have been 
virtually impossible or impracticable to secure 
otherwise. 

Suppliers of Public Service, such as telephone, 
electric light, gas and water companies, realized 
the many benefits which could be secured 
through simplified accounting and used the 
Electric Tabulating and Accounting Machine 
method for securing their statistical data, but 
one of the pioneers in adopting the principle of 
Punched Hole Accounting were the railroads, 
who have appreciated their value almost from 
the time of their inception. They were among 
the first to utilize this method of accounting 
after its use in enumerating the Census of 1890, 
as they were seeking a means of relief from 
their tremendous accounting problems, this 
need being further accentuated by the demands 


150 


Punched Hole Accounting 

of the Interstate Commerce Commission who 
were calling for statistics and information which 
it was almost impossible to accurately obtain by 
manual methods. 

The application of these machines is being 
constantly increased by the railroads, who find 
them an invaluable aid in revenue accounting as 
well as in other statistical needs arising in the 
transportation field. This may be more readily 
comprehended when it is realized that railroads 
using 80% of our 250,000 miles of trackage in 
the United States, are successfully applying the 
principle of Punched Hole Accounting to their 
statistical and accounting requirements. 

Electric Automatic-Control Tabulating 
Machine 
46 

The next picture illustrates one of the recent 
acquisitions to our line of Electric Tabulat¬ 
ing and Accounting Machines, and is known as 
the Electric Automatic-Control Tabulator. This 
Tabulator adds at a speed of 150 cards per min¬ 
ute and does not require stop cards; it stops 
automatically between each change in the class 
of information tabulated, and is equipped to add 


151 


Punched Hole Accounting 


and indicate any portion of either 42 or 45 
columns of a Tabulating- Card. 

For illustration, in the compilation of a pay¬ 
roll, all of the cards for Man No. 1 would be ac¬ 
cumulated and when the last card for Man No. 1 
had passed through the machine, the Tabulator 
would stop, automatically permitting the record¬ 
ing of the figures appearing on the counter, 
after which, by simply pressing a button, 
the machine would again automatically clear 
the counter used for accumulating the amount 
of wages for Man No. 1 and add the cards for 
Man No. 2, the same process being followed for 
compiling the entire payroll. 

This machine is supplied with five counters. 
Each counter can be used to accumulate individ¬ 
ual information and cleared at the end of each 
group of facts which have been accumulated, or 
the first counter can be used to indicate sales¬ 
man’s number or any other reference informa¬ 
tion. The reference data appearing on this 
counter remains constant for each class of in¬ 
formation while the amounts relating thereto 
are being accumulated; the second counter, if 
an analysis of sales and profits, by salesmen, is 
being compiled, can be used to accumulate the 
sales for each salesman; the third counter could 


152 


Punched Hole Accounting 


be used for accumulating the cost of sales for 
each salesman; the fourth counter would supply 
the total sales of all salesmen combined, and the 
fifth counter would indicate the total cost of all 
goods sold. With but a single operation for 
each card, the sales, as well as the cost of goods 
sold, are secured, the difference for all of the 
cards for an individual salesman supplying the 
gross profits earned by each salesman. 

Electric Accounting Machine 
47 

The latest addition to our line of machines is 
the Electric Accounting Machine, which 
prints either finished reports or supplies printed 
work sheets direct from the punched cards. The 
machine can be arranged for either single or 
double standard typewriter spacing and will 
print complete data from individual cards at the 
rate of 75 per minute, or supply final reports, b j 
printing totals only for all of the cards for a 
specific class, at the rate of 150 cards a minute. 

This machine is made in two types. The 
Model 5 Electric Accounting Machine adds 
or indicates and prints, simultaneously, five col¬ 
umns of data, of eight digits each. The Model 7 
Machine operates at the same rate of speed but 


153 


Punched Hole Accounting 

it prints seven columns of information, consist¬ 
ing of two columns of data of an indicative or re¬ 
cording nature, such as account number, man 
number, State or County number, etc., of ten 
digits each, and adds or indicates five columns of 
figures of eight digits each. 

While either type of Printing Machine, which 
is likewise true of the Non-printing Machine, 
adds individual amounts consisting of eight dig¬ 
its each, which is equal to $999,999.99, it accum¬ 
ulates and, in the case of the Printing Machine, 
likewise prints totals consisting of nine digits 
for each column, or each counter has an accumu¬ 
lating capacity of $9,999,999.99 for each sepa¬ 
rate class of information tabulated. 

The Electric Accounting Machine is further 
supplied to likewise add and indicate any por¬ 
tion of either 42 or 45 punched columns of a 
Tabulating Card and is also equipped with the 
automatic control which stops the machine at 
the end of each group or class of informa¬ 
tion of a like nature, prints the accumulated 
figures, together with the classification or 
group numbers, clears the adding mechanism 
used for securing the total of each group or like 
class of information, and automatically starts to 


154 


Punched Hole Accounting 

again operate and accumulate the information 
for the next group or class of data. 

This machine inaugurates a new era in statis¬ 
tics and makes possible the securing of printed 
data and information which it would not be 
practicable to obtain by any other method. 

Plug Board—Wired 
48 

The picture appearing before us shows a plug 
board, fully wired, with connections made for 
adding and indicating the information punched 
on a Tabulating Card. 

This illustration readily indicates the reason 
for the flexibility of Tabulating Machines. The 
second, third and fourth series of holes repre¬ 
sent the 42 or 45 columns on a card and con¬ 
nect directly with the point at which the contact 
is made when the cards pass over the brushes 
which are located at the feed on the upper left 
hand side of the machine. Wherever the card 
has been punched a contact is made and the 
figure is indicated or the amount is added, as the 
case may be, providing the corresponding upper 
hole in the plug board has been connected by a 
plug wire with the lower series of holes which 
connect directly with the counters. The loca- 


155 


Punched Hole Accounting 

tion of the hole in the card and the timing of 
the machine determines the amount added, as 
each column on the card has nine adding po¬ 
sitions and one position for zero. 

These plug boards are made with 42 or 45 
holes in a row, corresponding with the columns 
on the card. The plug board appearing before 
you has 42 holes. You will note we can add the 
various amounts punched on the cards in what¬ 
ever counter desired. These same amounts can, 
in turn, be accumulated, sub-totals and grand 
totals being secured as needed, through the use 
of additional plug wires inserted in the proper 
series of plug holes, representing the fields on 
the card, the other end being plugged in the 
lower series of holes corresponding with the 
counter in which it is desired to accumulate 
the amount added on one of the other coun¬ 
ters. For illustration, if an amount of $325.75 
is to be added, five plug wires would be used to 
make the necessary connections, one plug wire 
being used for each position of units, tens, hun¬ 
dreds, etc., for all amounts which are to be added 
or indicated. 

You can, therefore, readily appreciate that as 
a card passes through the machine, the con¬ 
tacts are made, the circuits closed and the 


156 


Punched Hole Accounting 

current goes to wherever the plugs are located in 
the second, third or fourth series of plug holes, 
thence through the wires to the lower row of 
plug holes which are connected with the counter, 
and the timing of the machine makes the adding 
wheels in the counter revolve to the same posi¬ 
tion as the holes which appear on the cards, or 
to $325.75. 

I have used a small sum to simplify the de¬ 
scription, but the same is true of any other 
amount which would be punched on the card. 
This principle, you will note, therefore, offers 
unlimited flexibility, permitting the adding of 
amounts appearing in the 40th to the 45th col¬ 
umns on the card in the first counter or amounts 
appearing in the 5th to the 10th column can 
be added on any of the other counters by merely 
inserting the two ends of the plug, the one 
end plugged in corresponding with the columns 
on the card and the other end inserted in the 
proper hole to correspond with the counter in 
which the figures are to appear. 

The principle of Punched Hole Accounting, 
together with the use of Electric Tabulating 
and Accounting Machines, supplies an account¬ 
ing system which is as flexible and unlimited 
as electricity itself. 


157 


Punched Hole Accounting 

Blank Plug Board 

49 

The next slide will indicate a plug board, un¬ 
wired. 

While the plug boards naturally vary in some 
details for different types of machines, they 
are all similar in principle. The one appearing 
before you is the type used in connection with 
the Electric Accounting Machine. 

A. The eight plug holes, or sockets, appearing 
under “A” are connected, for control purposes, 
by plug wires with any of the sockets in Row 
“B” 

B. These sockets represent columns on a card 
and are used for control purposes only, any eight 
of which may be controlled as desired. 

C. As the control unit functions on eight 
columns, this connection. enables the columns 
controlled to be reduced to any number required, 
merely by plugging in on Row “D ” By insert¬ 
ing the plug in the first hole to the left of the 
maximum number of columns which it is de¬ 
sired to control, those in excess of this number 
up to the eighth control column are automatic¬ 
ally eliminated. 


158 


Punched Hole Accounting 

D. The sockets in this raw are connected with 
the control unit and are used to cancel the 
columns which it is desired to eliminate. 

E. These rows of plug holes represent the 
forty-five vertical columns on a card and are 
used for indicating individual amounts or for 
adding or accumulating totals. 

F. These holes are plugged in to the Row 
“E” sockets corresponding with the plugging 
of Row “B” and complete the control circuit. 

G. These sockets are connected directly with 
the five counters. 

H. The five “H’s” represent the eight posi¬ 
tions of each counter. Plug wires are run from 
the columns in Row “E,” which are to be added 
or indicated, to the same number of positions 
for any counter appearing under “H.” 

I. Represents the unit, or first position on 
each counter. 

J. The two sockets to the right of “K” con¬ 
nect with any counter and accumulate the num 
ber of cards tabulated. 

K. These switches prevent their respective 
counters from listing when it is desired to print 
totals only. 

L. This switch regulates the machine so that 


Punched Hole Accounting 

it will stop automatically at the end of each con¬ 
trol group. 

M. This switch controls the automatic start¬ 
ing of the machine after totals for each group 
have been printed. 

N. This switch controls the combined print¬ 
ing of totals at the end of each group and, with 
the same operation, automatically re-sets the 
counter to zero. 


Electric Card Counting Tabulating Machine 

50 

The Digit or Card Counting Tabulator, illus¬ 
trated in the next picture, operates at a speed 
of 250 cards per minute. This machine is used 
where a hole in a column represents a specific 
class of information and a card is used as a unit 
of statistical records, such as employees statis¬ 
tics, vital statistics and other data of a like 
nature. It is equipped with fourteen counters; 
twelve of these counters supply individual totals 
and two sub or cumulative totals. 

To illustrate the use of the Digit or Card 
Counting Tabulator in analyzing labor turnover, 
for cause of termination, a digit would be 


160 


Punched Hole Accounting 

punched in each card to represent cause of ter¬ 
mination, each separate cause being- indicated 
by the punching of a different numeral. The 
tabulating of these cards would register “one” 
on a counter of the machine, corresponding with 
the numeral which was punched. After all 
cards have been tabulated, the total on each 
counter would indicate the number of termina¬ 
tions for a specific reason, each one of the 
twelve counters representing a different reason. 
The two extra counters supply sub totals, as de¬ 
sired, and the grand total of all cards tabulated. 

As previously stated, the machine only adds 
digits of “one” for each card passing through 
the machine, regardless of the location of the 
hole punched in a specific column. For an or¬ 
dinary tabulation, the cards counted on this 
machine require no sorting, but to analyze the 
number of terminations by departments, pre¬ 
suming that employees records are maintained 
in alphabetical order, by name of employee, re¬ 
gardless of department, the cards in this case 
would be sorted first by departments before 
being tabulated. 

This same procedure is followed in securing 
vital statistics and for obtaining all other classes 
of data where a card is a complete unit of 

161 , 


Punched Hole Accounting 


record. These cards supply an almost unlimited 
range of information through their repeated 
tabulation. 


Payroll Preparation 

51 

The next slide will bring out the unlimited 
adaptability of Electric Tabulating and Account¬ 
ing Machines. You will note on the illustration 
before you that the upper row of counters of our 
Electric Tabulator shows the preparation of a 
payroll. The first counter indicates the man 
number—the second counter shows the number 
of hours spent on the job covered by this card. 
Please note that while this information appears 
on the second counter, it was, however, punched 
in the next to the last field on the card, again 
indicating the flexibility of this machine. The 
third counter shows the man earnings for the 
job in question. This card is naturally one of 
many which are being accumulated on the ma¬ 
chine for each individual man. The fourth and 
fifth counters supply the control figures for 
payroll and cost purposes—the former counter 
indicates the total hours of all men appearing 
on the payroll, and the latter shows the total 
amount of wages paid. 


162 


Punched Hole Accounting 
Cost Analysis 

The lower series of counters shows an entirely 
different class of information, but all secured 
from the same record, and illustrates in a simple 
manner the process of compiling costs from the 
same cards upon which the payroll is based. This 
method of cost finding assures accurate costs, 
as the same records upon which wages are paid 
are in turn used for securing the manufacturing 
cost of an article, eliminating the inaccuracies 
which are possible where records are compiled 
manually. The point should be emphasized, on 
account of its unusual importance, that the same 
record upon which the payment of wages is 
based, is in turn used for compiling the cost or 
the article for which these same wages were 
paid, thereby making certain that the amount 
paid for labor is actually absorbed in the manu¬ 
facturing cost of the article. 

The first counter in the lower series, cover¬ 
ing Cost Analysis, indicates the order number 
appearing on the sixth field on the card. The 
second counter gives the operation number ap¬ 
pearing in the eighth field on the card. The 
third counter indicates hours appearing on the 
tenth field on the card. Please note that the 


163 


Punched Hole Accounting 


same hours that were used in compiling the 
payroll appearing in the second counter of the 
illustration above, are again used but now ap¬ 
pear in the third counter, once more indicating 
the flexibility of Electric Tabulating and Ac¬ 
counting Machines. The fourth counter indi¬ 
cates the cost of the operation and is the same 
as appeared in the third counter of the above 
illustration, again assuring the inclusion of the 
same amount when compiling costs that was 
used when compiling the payroll. 

We have another counter, however, as our 
work of compiling costs has been based on not 
only securing the cost of the order but the cost 
of each operation, and as the figures represent¬ 
ing the cost of each operation have been cleared 
in the fourth counter and the cost of a new 
operation accumulated in this counter, the total 
order cost for all operations is being constantly 
added in the fifth counter, supplying operation 
costs as well as total order costs, simultaneously. 


164 


Punched Hole Accounting 


Payroll 

52 

Payrolls are required in all lines of business. 
They can be compiled in detail or in total. The 
latter type of payroll, however, does not permit 
a study of the class of labor paid or the pro¬ 
portion between day and piece work in either 
hours or amounts. 

A scrutiny of payrolls, showing the division 
between these different classes of wages paid 
and the hours worked, will supply general in¬ 
formation for quick review by a busy execu¬ 
tive. 

The payroll sheet appearing before you can 
be compiled through the use of Electric Tabulat¬ 
ing and Accounting Machines on a basis of abso¬ 
lute accuracy. The same cards which determine 
the amount of wages due individuals can be re¬ 
sorted and tabulated to supply detailed data 
and accounting records, as will be illustrated by 
the following reports and forms. 


165 


Punched Hole Accounting 

Labor Distribution 

53 

The cards which were used for compiling the 
payroll are merely re-sorted and tabulated to 
supply the information for the report appear¬ 
ing before you. Distribution of labor is an 
essential in all manufacturing plants. The use 
of Electric Tabulating and Accounting Machines 
makes it possible to obtain detailed information, 
such as appears on this report, indicating not 
only the amount of productive and non-produc¬ 
tive labor but hours, as well, together with job 
and account numbers; the latter information 
makes possible a division of the amounts 
charged against each order, excessive amounts 
being immediately noticed and indicated by ac¬ 
count number, when the distribution of labor 
is, made at the end of the payroll period. 

Labor Analysis 

54-55 

The report appearing before you is one of im¬ 
portance in all business organizations. Those 
of a commercial type naturally require an analy¬ 
sis of a different nature than do manufacturing 
organizations. 


166 


Punched Hole Accounting 

The analysis of labor offered for review, rep¬ 
resents a manufacturing- payroll and is made up 
from the same cards that were used in compil¬ 
ing the payroll. After the payroll was com¬ 
pleted, the same card which will appear on the 
next slide was used to make up the statement 
presented. 

A report of this nature, as you will readily 
appreciate, not only shows the amount of wages 
paid for day work, piece work and non-produc¬ 
tive labor, but bonus and overtime are included, 
as well. In addition, the distribution of hours 
between day work, piece work and non-produc¬ 
tive work is secured simultaneously with the 
distribution of wages, permitting a review of 
non-productive hours as compared with the 
number of hours expended on a day work and 
piece work basis. 

Hours are naturally of greater value in re¬ 
viewing production and output than wages, 
which are affected by varying rates for dif¬ 
ferent classes of work. These same cards, in 
addition to being used in compiling and distrib¬ 
uting the payroll and supplying other classes of 
statistics, can be further used to obtain a di¬ 
vision of costs between day work and piece 
work, by jobs, operations or departments, in 


167 


Punched Hole Accounting 


order to guard against an excess amount of 
day work where piece work should, instead, be 
used. Abnormal variations between manufac¬ 
turing costs and estimates, or other factors 
which may require investigation, can readily be 
analyzed through the use of Electric Tabulating 
and Accounting Machines. 

Report of Parts and Operation Costs 

56 

The labor cards previously used for making- 
up various classes of statistics, will supply addi¬ 
tional information of an unusual nature, as by 
merely re-sorting and tabulating these same 
cards, the amount of labor expended, either by 
part numbers or operations, or both, can readily 
be obtained. Information of this nature is of 
value for making comparisons of actual costs 
with engineering estimates. The reason for ex¬ 
cessive costs can be immediately located through 
the use of Electric Tabulating and Accounting- 
Machines, and the conditions causing the in¬ 
crease rectified, thereby assuring the estimated 
volume of profits, based on manufacturing costs, 
upon which selling prices are determined and 
anticipated profit rates figured. 


168 


Punched Hole Accounting 

Idle Machine Report 

57 

The next slide will illustrate one of the hidden 
losses of a manufacturing business. 

A detailed analysis of idle machine losses 
and the reason for idleness, is important. Non¬ 
operating machines incur a double loss—they 
not only delay output, which is the usual im¬ 
pression an idle machine creates, but they 
increase the amount of overhead applicable to 
each order, due to the lower amount of produc¬ 
tion, the net result being an increase in costs 
and a decrease in profits. 

The Idle Machine report appearing before you 
not only shows the reason for idleness but the 
total amount of time lost for each reason, as 
well, and is made up in such detail that it would 
not be practicable to attempt to supply this in¬ 
formation manually. 

Please note the second column on the left 
side of the report, which indicates the percent¬ 
age of productive hours for a department. The 
last column shows the percentage of idle hours, 
permitting a quick review both of productivity 
and idleness in a plant. 


169 


Punched Hole Accounting 

After the Tabulating Cards have furnished 
the information appearing on this report, they 
can be arranged to supply other data, including 
a report of idle hours, by machine numbers. A 
report* of this nature would immediately indi¬ 
cate any plant items which are idle for an ex¬ 
cessive period and, if due to repairs, the advis¬ 
ability of replacement could be intelligently con¬ 
sidered and the authorization for the pur¬ 
chase of new plant made on a basis of facts. 
Such a report would, likewise, reveal excessive 
charges for set-up time, which is usually paid 
on a day rate basis, for the presumed period of 
idleness, although the machine may be in pro¬ 
duction and peace work rates are being paid 
for the output. 

Report of Labor Turnover 

58-59 

Labor turnover may be classed as an expen¬ 
sive luxury, but it is one of the things which 
can be eliminated or greatly reduced. 

However, to eliminate labor turnover or re¬ 
duce it to a minimum, a report, indicating the 
reason for the release or dismissal of employees, 
by cause as well as by department, is essential 
to indicate whether the elimination is due to 


170 


Punched Hole 'Accounting 

the type of worker employed, conditions in a de¬ 
partment, specific class of work or other cause. 

The next slide will illustrate a comprehensive 
Report of Labor Turnover, which can be readily 
compiled through the use of Electric Tabulating 
and Accounting Machines in conjunction with 
the employee’s history card, which is made* up 
when the employee is placed on the payroll. The 
card used for this purpose may be a dual Tabu¬ 
lating Card and all data relative to employment, 
including clock number, department assigned to, 
rate, date of birth, nationality, date employed, 
etc., is recorded on this card, or any other em¬ 
ployees record form may be used and the data 
transferred to a regular Tabulating Card by 
means of punched holes, as indicated by the 
next slide. When an employee leaves, the 
reason for his resignation or dismissal, together 
with the date, is specified on these records. 
After the necessary information for the Labor 
Turnover Report has been obtained, the card is 
transferred and filed, a complete record thus 
being maintained of all former employees. 

The report appearing before you supplies de¬ 
tailed operating information of unquestioned 
value, as eliminations and employment of new 
help will, except under highly favorable condi- 


171 


Punched Hole Accounting 

tions in the class of help employed, result in 
reduced output, which is merely another name 
for reduced profits, as new help naturally re¬ 
quires a certain period of time before they have 
the same productive capacity as the more ex¬ 
perienced labor which may have been released. 
This intervening period while new labor secures 
its experience, results in a loss to the business 
which, through a study of labor conditions, can 
be virtually eliminated. 

The section of the report, therefore, which 
shows new employment, is almost as important 
as the section indicating the cause for elimina¬ 
tion. For illustration, please note the second 
item on the report, which shows a replacement 
of six employees and the addition of twelve em¬ 
ployees, due to increased production. This com¬ 
bination will naturally result in a comparative 
decrease in production, as sufficient business is 
on hand to warrant increasing productive labor, 
indicating the necessity of additional competent 
help, but even though this department requires 
additional help, it was necessary to replace six 
of the present employees, the entire change re¬ 
sulting in placing approximately 16% new work¬ 
ers in one department of the organization alon^. 

A study as to why these dismissals or elimin- 


172 


Punched Hole Accounting 

ations occurred, especially when work in the 
department is on the incline, indicates the in¬ 
teresting condition that three employees were 
found incompetent. Had a more careful selec¬ 
tion of the class of labor employed been made, 
the economic waste incurred in this case would 
have been avoided, or no doubt at least reduced, 
as 50% of those leaving were dismissed due to 
incompetency in performing the work assigned 
to them. 

The sixth item shows that four employees left 
the business, due to dissatisfaction. This ques¬ 
tion should be investigated promptly and thor¬ 
oughly, as the result of such an investigation 
may disclose the -fact that the element of dis¬ 
satisfaction is not caused by the policies or 
methods of the company, but, instead, the fore¬ 
man or department head may be the cause of 
the discontent. 

The tenth item indicates six releases, due to 
the rate of pay, again indicating the possibility 
of losing a good class of labor on account of 
rates of pay not being sufficiently high to either 
attract or hold good workers. This condition is 
reflected in the fact that while there were six 
employees who left on account of dissatisfaction 
with the rates of pay, there were no new em- 
173 


Punched Hole Accounting 

payees hired, indicating difficulty in securing 
the proper class of labor at the existing rates. 

The total turnover rate, per month, for all 
causes, shows 8%, or if this report can be ac¬ 
cepted as reflecting average conditions, it 
would indicate that the average period of em¬ 
ployment is but twelve and a half months or, 
to put it differently, a little more than once a 
year a new organization is employed. This rate 
of turnover incurs a tremendous economic waste 
and loss, as labor has neither an opportunity 
to become thoroughly acquainted, loyal or satis¬ 
fied with their duties, nor are they in a position 
to render their best services where the constant 
conditions of change continue, as this report 
reveals. 

The conservation of labor and the reduction 
of labor turnover assures greater profits and a 
better class of labor, but in order to realize all 
of these factors, a detailed study of the elimina¬ 
tions and additions in a plant, which can be 
readily secured through the use of Electric Tab¬ 
ulating and Accounting Machines, is essential. 


174 


Punched Hole Accounting 

Report of Labor Change 

60 

The next slide will indicate, in part, the effect 
which a changing labor personnel has on pro¬ 
ductive hours. It indicates, as well, that while 
the manning of a plant or department with suf¬ 
ficient workers, is important, the number of 
employees appearing on the payroll is not in 
itself sufficiently informative, as the number of 
productive hours, by departments, is likewise 
essential. 

The report appearing before you illustrates 
the subject of Labor Change in a comprehensive 
manner and can be made to cover either a 
weekly or monthly period. This data was se¬ 
cured from the same cards from which the pay¬ 
roll was compiled and from which the number of 
employees for the Labor Turnover Report was 
obtained. It will be recalled that these same 
cards were also used in distributing labor, com¬ 
piling costs and supplying other manufacturing 
data, assuring the complete uniformity and 
agreement of all reports and accounting records, 
again indicating the almost unlimited flexibility 
of the art of Punched Hole Accounting and Elec¬ 
tric Tabulating and Accounting Machines. 


175 


Punched Hole Accounting 

Economy in administration demands maxi- 
mum output for the prescribed number of hours 
for each work day. To accomplish this, how¬ 
ever, each machine must be manned for a full 
day’s work; each bench must be occupied by a 
competent worker for the standard work day 
and no vacancies or short-handed sections of a 
department can exist for even a part of a day, 
if maximum output is to be obtained. 

In order to secure these results, an intimate 
study of “Labor Change” is essential. The re¬ 
port appearing before you supplies a complete 
review of this important subject which has such 
a direct effect on costs and profits. 

Please note the second item on the report. 
The fifth column indicates an increase of 21.4% 
in productive workers and 28.6% increase in 
non-productive workers. The increase in hours 
for the same department, however, shows only 
14.9% for productive labor and 28.5% for non¬ 
productive labor, The reduction in hours, as 
compared with workers, is due either to short 
work days for some of the workers or the ab¬ 
sence, during the pay period, of others. The 
increase in the number of workers, while show¬ 
ing a satisfactory condition, if reviewed individ- 


176 


Punched Hole Accounting 

ually, shows an unsatisfactory condition when 
coupled with total hours worked. 

Again, referring to the total of all depart¬ 
ments, productive workers showed an increase 
over the preceding week of 6%, and non-produc¬ 
tive workers a like increase. The productive 
workers, however, only showed an increase of 
3.7% hours, whereas the non-productive work¬ 
ers showed an increase of 6.3%, the latter nat¬ 
urally indicating a satisfactory condition, but 
the former again showing enough workers but 
not enough productive hours when compared 
with the preceding period. 

This report indicates the need of having the 
number of employees as well as hours worked, 
in order to determine the productive efficiency 
of an organization. Neither number of em¬ 
ployees, individually, nor hours worked, will 
supply this information, but a combination of 
both assures the benefit which always accrues 
through the use of factors which correlate, one 
with another, and statistics and data of this 
nature will, when used and studied, result in 
eliminating conditions and causes which, while 
showing a full numerical complement of man¬ 
power, do not, however, supply the same relative 
177 


Punched Hole Accounting 


number of work-hours in comparison with the 
number of workers employed. 

Basic Information Is Essential For Correct 
Costs 
61 

Accurate costs naturally require correct basic 
information. The next slide which appears on 
the screen illustrates the basis for accurate 
costs, showing- only a small portion of the Time 
Recording Devices, including Job Time and At¬ 
tendance Recorders and Recording Door Locks, 
which are manufactured and distributed by the 
International Time Recording Division of the 
International Business Machines Corporation. 

To assure correct costs, the exact amount of 
time spent on a specific job or operation is es¬ 
sential, but other time records are important, 
as well, for the proper operation of a plant or 
organization. 

The various models appearing before you in¬ 
clude spring driven equipment as well as electric 
impulse and electrically synchronized systems. 

The electrical systems manufactured by this 
Division of the International Business Machines 
Corporation operate from a single Master. Clock. 
Other clocks, which are referred to as “secon- 


178 


Punched Hole Accounting 

daiies,” placed in General and Executive Offices, 
as well as throughout the plant, are controlled 
by the same Master Clock. 

In these electrical time systems can be in¬ 
cluded, in addition to those referred to above, 
Electric Time Stamps and Program Devices, the 
latter supplying a general signal for stopping 
and starting time for the noon hour as well as 
the beginning and close of the day’s work. 

Recording Door Locks offer protection to plant 
and office entrances, as well as sections of 
the Manufacturing Department which require 
special protection, such as the Tool Room, Com¬ 
pound Room, Stock Room and other divisions 
which it is desired to guard in the fullest sense 
possible. 

Electric Door Locks register the time the 
door is unlocked, and indicate, as well, whether 
it was opened from the inside or outside, and 
by whom. When the door is locked, it again 
registers both the time and the person closing 
the door, as each key is an individual one and 
registers the user of it at any time throughout 
the day or night. 

This device, which is of unusual value for 
protecting a plant from outside as well as in¬ 
side intrusion, can be readily installed and made 


179 


Punched Hole Accounting 


a part of the electrical system of an organiza¬ 
tion and operates from the same Master Clock 
which supplies uniform and accurate time in 
all sections of the plant. 

Job Time Recorder 
62-63 

The next slide will illustrate the International 
Job Time Recorder, which registers the start 
and finish of a job in hours, minutes, tenths or 
periods. The marker on the front of the machine 
regulates the printing position of the registra¬ 
tion of the starting and stopping time on the 
card. The card is inserted in the slot appearing 
under the marker when the job is started, and 
again when it is completed. The depression of 
the printing lever on the left-hand side of the 
machine records either the starting or stopping 
time, as the case may be. 

This recorder supplies essential information 
for accurate labor and payroll costs, and is 
either electrically operated from a Master Clock, 
requiring no winding or setting, or it can be 
furnished with spring-driven mechanism, each 
clock being a self-contained unit. 

The next slide will show a Job Time Tabulat- 


180 


Punched, Hole Accounting 

ing Card with Job Time Recorder registrations, 
indicating month, day, hour and tenths. 

The printing of the stopping time above the 
starting time, appearing on the left side of the 
card, simplifies the computation of elapsed time. 


International Money Time Recorder 

64-65-66 

The device which appears on the next slide 
is one of unusual importance to manufacturers, 
and as its value cannot be over-emphasized, the 
presentation of the machine is deserving of the 
undivided attention of all. 

The Job Time Recorders in general use, with 
but a single exception, merely print the starting 
and stopping time of a job, necessitating a 
manual operation to obtain the amount of 
elapsed time spent on a specific order, after 
which the further work of rating, extending 
and verification is necessary to arrive at the 
cost of a job. 

Please notice that all of these supplementary 
operations, which are likewise true, but to even 
a greater extent, where no Job Time Recorders 
are used, are essential for securing the amount 
of time and money chargeable to a job. Fur- 


181 


Punched Hole Accounting 


ther, every job worked on requires a duplica¬ 
tion of the same series of operations, resulting 
in a needless amount of detail routine and ex¬ 
pense, all of which, however, was necessary 
under past methods and was essential to secure 
the amount of labor spent on a job for payroll 
and cost accounting needs. Moreover, all of 
these routine internal operations did not im¬ 
prove cost or other accounting data obtained 
in this manner, as each computation, whether 
to procure the amount of elapsed time or the 
value of labor expended on a job, opened up an 
additional possibility of error through erroneous 
computations, transpositions of figures and 
ether inaccuracies which are always liable to 
occur where figures are compiled manually. 

The machine which appears before you is the 
latest and most advanced type of cost account¬ 
ing machinery, and is known as the Interna¬ 
tional Money Time Recorder. It has placed the 
question of securing correct costs on a basis 
of accuracy and efficiency never made possible 
before through any mechanical or manual 
method, as with but a single operation the ma¬ 
chine indicates on a Tabulating Card, by merely 
inserting the card in the slot appearing on the 
top of the machine, the man number and in- 


182 


Punched Hole Accounting 

dication that work has started. This card 
can be further used, after the completion of 
the operation, for preparing and distributing 
the payroll, compiling order, operating or part 
costs, together with other accounting and sta¬ 
tistical data. 

After the completion of the job, by pull¬ 
ing down the handle at the front of the ma¬ 
chine, the total cost and amount of elapsed 
time for the job is printed on the card, eliminat¬ 
ing all further computations or verifications, 
as the machine has supplied a mechanically ac¬ 
curate record of all of these factors with but 
a single operation. 

In addition, the International Money Time 
Recorder will supply, with equal facility and 
rapidity, the amount of burden applicable to 
each job or operation at the same time that the 
machine supplies the amount of elapsed time 
and labor, thereby eliminating all further cal¬ 
culations, the compiling of costs being reduced, 
through the use of this machine and Electric 
Tabulating and Accounting Machines, to a 
mechanical operation. 

Before proceeding further with a description 
of the unusual results which are secured 
through the use of the International Money 


183 


Punched Hole Accounting 

Time Recorder, a momentary review of the next 
slide, indicating the comparative steps which 
are necessary to obtain elapsed time, labor and 
burden costs, through the use of ordinary cost 
recorders or manual methods, as compared with 
the operation of this machine, will be of un¬ 
usual interest and value. 

The first step in present systems and routines, 
as indicated in the illustration appearing before 
you, is the registration of starting time. The 
second is the registration of stopping time, after 
which cards are released and sent to the pay¬ 
roll department. The third step consists of rat¬ 
ing the cards. The fourth comprises the veri¬ 
fication of rates. The fifth step, to arrive at 
the amount of labor expended on a job, consists 
of computing the amount of elapsed time. The 
sixth requires the verification of the amount 
of elapsed time. The seventh step, to arrive 
at payroll and cost figures, calls for extending 
the amount of elapsed time into money value 
for each employee and job. The eighth step 
is the verification of the amount of elapsed 
time into money value. The ninth step con¬ 
sists of computing the amount of burden ap¬ 
plicable to each job. The tenth or final step, 
in the preparation of cost figures, covers the 


184 


Punched Hole -Accounting 

verification of the amount of burden charged 
to each job. 

Please notice that all of these intermediate 
steps, consisting in total of ten operations, are 
essential to secure accurate payroll and cost 
figures, none of which can be ignored. To fail 
to do a single one would necessarily eliminate 
the element of accuracy in payrolls and costs, 
which is essential. 

The International Money Time Recorder, 
which appears before you, however, eliminates 
all of the intermediate steps, and in addition 
to supplying mechanically accurate results 
of time and labor expended on a job for 
both payroll and cost purposes, furnishes bur¬ 
den or overhead figures as well, with but two 
operations. Or, to state the saving in a simple 
but expressive manner, the device which ap¬ 
pears before you saves eight operations, or 80% 
of the many needless, expensive and error- 
making steps which each additional handling 
of figures manually makes possible. 

Please note that this machine eliminates all 
pricing and internal work ordinarily expended 
on labor cards, job tickets or other records. 
It furthermore assures including the correct 
amount of overhead or burden applicable to a 


185 


Punched Hole Accounting 

specific job in direct proportion to the amount 
of time expended on the job. The distribution 
of burden, in connection with this machine, 
naturally offers a greater degree of accuracy 
than the methods in general use, as a study 
of overhead costs will permit the adoption of 
basic burden rates which apply to a specific 
department or section of a plant, varying rates 
being used to meet individual conditions. 

It is needless to dwell on the importance of 
the distribution of overhead, especially where 
in many cases burden equals or exceeds the 
amount of productive labor. 

The distribution of burden, however, by the 
International Money Time Recorder offers an 
unusual opportunity for comparison, in total 
and by departments, of the amount of burden 
distributed for a specific month or period, with 
the total amount of overhead incurred over the 
same period of time, indicating in a definite and 
accurate manner, which is not subject to ques¬ 
tion, the amount of unabsorbed overhead for 
any specific month or period, thereby guarding 
against unexpected decreases in profits when 
books are closed at the end of the year. These 
shrinkages in profits in many cases are caused 
by the use of incorrect burden rates which do 


186 


Punched Hole \Accounting 

not permit the output and work in process for 
the year to absorb the total amount of overhead 
expended. The machine, therefore, which ap¬ 
pears before you, is not only a cost recorder 
which supplies unusual information, but it is 
a cost protector and profit producer, as well. 

The International Money Time Recorder, 
however, is not limited to reducing* expensive 
manual and non-essential operations, but it also 
increases output, as each worker is supplied 
with a machine which is electrically operated 
and controlled by a Master Clock at a cen¬ 
tral point. This machine, therefore, which as¬ 
sures accuracy and reduces details until they 
are a negligible factor, also eliminates the time 
consumed to report the start or finish of a job, 
which ordinarily is either recorded manually or 
registered on a Job Recorder located at a cen¬ 
tral point, as each worker has the Money Time 
Recorder conveniently placed at his bench or 
machine, thereby eliminating the waiting, talk¬ 
ing and visiting time, which results, in the 
conservation of time and the assurance of ac¬ 
curate costs through the use of the Interna¬ 
tional Money Time Recorder, as the starting 
and finishing time is recorded when work ac¬ 
tually begins or is completed. The little late 
187 


Punched Hole Accounting 


arrivals and early departures, or delays in start¬ 
ing work after arriving at benches, are imme¬ 
diately indicated, as the difference between 
the total time supplied by the International 
Money Time Recorder and the records showing 
arrivals and departures furnished by Interna¬ 
tional, Dial or Card, In-and-Out Clocks, supplies 
the amount of lost, idle, or non-productive time, 
per man or machine, which lessens output, in¬ 
creases costs and reduces profits. 

The importance of reducing the element of 
non-productive time to a minimum is readily in¬ 
dicated by just considering the factors of walk¬ 
ing and talking time in a plant of one thousand 
productive workers. We will assume that each 
man averages but two and a half different jobs 
per day and that it requires only two minutes, 
under ordinary conditions, to report or register 
starting and stopping time on each job. The 
daily loss, on the basis of two and a half jobs 
per man, without considering the element of 
late arrivals, premature departures, or other 
items, is equal to a loss of five thousand minutes 
daily or approximately 83 hours per day. 
Figuring, conservatively, that the average rate 
is fifty cents per hour, the lost time for this 
one element alone would amount to $41.50 per 


188 


Punched Hole Accounting 


day, or based on a 25 working-day. month, an 
average loss of $1,037.50 per month is incurred. 
Or an unnecessary waste of five minutes per 
day, per worker, results in an annual loss of 
$12,450.00, which can be conserved through the 
use of this machine. This, however, is only a 
part of the saving which the International 
Money Time Recorder makes possible. The 
monetary value of accurate costs cannot be esti¬ 
mated. While this element should be considered, 
we, however, will deal only with basic factors, 
and the initial saving of $12,450.00, which is 
equivalent to 6% interest on approximately 
$200,000.00, indicates that the use of these ma¬ 
chines is an unusually sound financial invest¬ 
ment and economic requirement for every manu¬ 
facturing plant, whether employing ten, or ten 
thousand productive workers. 

But this saving is further greatly increased 
by the reduction in clerical help, made possible 
through the automatic computation of the 
elapsed time, value of labor and amount of over¬ 
head spent -on a job. The economies and sav¬ 
ings which can be effected in each organization 
can be readily computed, as they are so marked 
and definite that they are not subject to ques¬ 
tion. 


189 


Punched Hole Accounting 

Another element of importance which the In- 

% 

ternational Money Time Recorder makes possi¬ 
ble and which cannot be overlooked, or its value 
depreciated in the slightest, is the condition of 
satisfied labor. The machine guards against 
payroll errors and differences, which always 
create dissatisfaction, and workers also are in 
a position to know their earnings in advance 
of pay-day. 

Payrolls can be completed through the use 
of the International Money Time Recorder at 
a correspondingly earlier period, as the figures 
received from each worker are final and ready 
for use, without further intermediate operations 
or any of the steps referred to above. 

The operation of this machine is simple. It 
precludes the possibility of errors and inaccu¬ 
racies in time or amounts, either by accident 
or design, as at the starting of a job the ma¬ 
chine automatically eliminates all previous 
figures, and at the registration of the stopping 
time the machine automatically locks until it 
is re-set, by a small detachable lever on the side 
of the machine, to indicate the starting of an¬ 
other job. The handle, which you see in front 
of the recorder, is supplied with each machine 
and is removed, after each registration, remain- 


190 


Punched Hole Accounting 

ing in the possession of the worker, thereby 
eliminating the possibility of another individual 
tampering with the machine in passing. 

While machines are conveniently placed on 
work benches, rates, however, can be obtained 
only when a registration is made. If rates of 
pay are preferred in code, they can be readily 
supplied, and earnings indicated in letter code 
form, as well. However, the adoption of this 
plan would naturally necessitate the decoding 
of rate codes in the office. The following will 
illustrate the simplicity of using a letter code 
for payroll rates: 

1234567890 

“BLACKSTONE” 

The ten letters indicate both rates and earnings, 
a 52-cent rate being indicated by “K L,” and 
the result for two and a half hours, amounting 
to $1.30, would be indicated by “B A E.” The 
use of payroll codes, however, would probably 
seldom be resorted to, and is an exception, but 
the unusual flexibility of the International 
Money Time Recorder makes it possible, with 
equal facility, to take care of unusual methods 
and requirements as well as the usual systems 
and routines. 

Costs, based on the International Money Time 
191 


Punched Hole Accounting 

Recorder, are accurate, as the figures sup- 
% 

plied by this machine are mechanically correct 
and possible errors in extension, in transposi¬ 
tions of amounts and other mistakes, which al¬ 
ways occur in direct ratio to the amount of 
manual effort which it is necessary to expend 
to arrive at a total through a series of computa¬ 
tions, are eliminated through the use of the 
machine appearing before you, which supplies 
the same information, with but two operations, 
that it is necessary to expend ten on to arrive at 
either manually or through other cost-keeping 
devices. 

Selling prices, which are merely reflected 
costs, will yield profits based on the volume of 
business done, if costs are accurate. Errors in 
costs, in even the most minor detail, imme¬ 
diately affect profits. 

Elaboration could be continued indefinitely on 
the many advantages which this machine offers, 
but the purpose in presenting it at this time 
is merely to acquaint you with one of the 
most advanced cost-keeping, profit-producing, 
expense-reducing products at the disposal of 
manufacturers. This machine commences to 
build profits immediately upon its use. It does 
not necessitate extensive changes in present 


192 


Punched Hole Accounting 

methods or routines, other than the elimination 
of such operations which are done manually, 
thus reducing the expenses and the number of 
people required to supply the same information 
which this machine furnishes with mechanical 
accuracy. 

The International Money Time Recorder can 
be used either as a separate unit, and present 
systems and methods followed, but at a reduced 
cost, due to the lesser number of people re¬ 
quired, or it can be used in conjunction with 
Electric Tabulating and Accounting Machines, 
and the savings and advantages increased still 
further and payrolls, costs, statistical state¬ 
ments and other data secured at a correspond¬ 
ingly earlier date than would be possible if the 
work were done manually. 

The International Time Recording Company 
is the pioneer in the art of time systems and 
methods, just as The Tabulating Machine Com¬ 
pany is in the principle of Punched Hole Ac¬ 
counting, and the products of this Company 
assist in the origination of profits through the 
information they supply, just as Electric Tab¬ 
ulating and Accounting Machines compute the 
profits which these other devices have origi¬ 
nated. 


193 


Punched Hole Accounting 

International Ticketograph 
Payroll 
67 - 68 - 69 - 70-71 

A recent acquisition to our line of business 
machines is the device appearing on the next 
slide, known as the Ticketograph. 

This machine is used where the coupon sys¬ 
tem of pay is in operation, and prints uniform 
information, with a single operation, on as many 
as 104 coupons at one time. The coupon ticket 
accompanies an order or lot and each worker 
detaches the corresponding coupon for the work 
performed, the order and ticket progressing to 
the next operation. The detached coupons re¬ 
tained by the worker are inserted in a coupon 
holder, as shown in the following picture. 

At the end of the pay period, the coupon 
holder, which includes both leaves and cover, is 
forwarded to the Payroll Department, together 
with a summary or statement card which is 
shown on the next slide. This card is made 
up by the worker and the payroll is compiled 
from these records after the statement card 
has been verified with the coupons. 

With this method accuracy is assured, as the 
machine is under the control of one person and 


194 


Punched Hole Accounting 

coupons are printed only in accordance with a 
pre-determined schedule of piecework rates 
which has been agreed upon. This machine 
guards against changes in quantities and rates 
upon which the payroll is based, and excess 
wages cannot be claimed. The detachment of 
a coupon for work not performed would imme¬ 
diately be noticeable, the work being returned 
for its performance and the detached coupon 
located by the serial and operation numbers, at 
once or at the end of the next payroll period, 
when books are turned in as a claim for wages 
due. The use of the International Ticketograph 
effectually guards against the payment of wages 
for work not performed. 

The worker, furthermore, under this plan, is 
permitted to review the progress of his work 
and the amount earned, and the sum due is 
known in advance of the pay period, thus elimi¬ 
nating all possibilities of wage disputes or dif¬ 
ferences. 

Production Control 

72 

A further important use of this machine is 
its adaptation to production control in any kind 
of industry, whether large or small. The applica- 


195 


Punched Hole Accounting 


.tion of the Ticketograph to production control 
automatically eliminates the use of tracers in a 
plant. It does not necessitate changes in exist¬ 
ing shop order methods or systems, as the same 
shop order forms in use at present can be con¬ 
tinued by merely adding a series of coupons to 
one copy of the order, or the upper portion of 
the coupon ticket can have a gummed edge and 
be pasted on the shop order form. The copy 
of the order form, with the coupon ticket at¬ 
tached, remains with the goods and progresses 
through the various departments of the plant. 

Production Board 

73 

The first coupon, which reads “Work Started,” 
is not detached from the coupon ticket until the 
order is released for production, at which time 
this coupon is inserted in the first pocket on 
the production board, indicating that the order 
has been released. 

As the work of a specific operation or a de¬ 
partment, whichever plan of production control 
is adopted, has been completed, the correspond¬ 
ing coupon is detached, indicating that the work 
has been completed, and deposited in a con¬ 
tainer. A clerk in the production office collects 


196 


Punched Hole Accounting 

these coupons periodically throughout the day, 
after which they are arranged by order number 
and inserted on the production board, as in¬ 
dicated in the next picture. 

This board is prepared with a series of 
pockets, each pocket representing an operation 
or department. The strip at the top of the 
pocket indicates the operation or department 
numbers; the strip at the bottom specifies the 
dates on which production is scheduled for each 
department or operation. The history card on 
the left of the board shows the order number, 
quantity of goods and month or months in which 
production is scheduled. This history card is 
prepared by the Production Department imme¬ 
diately upon receipt of each order, and inserted 
in the pocket on the board, thereby indicating 
the receipt of the order. 

A plan of Production Department notification 
can be readily adopted in connection with the 
use of coupons and the Ticketograph through 
the preparation, by the Sales or Order Depart¬ 
ment, of a Notification History Card of an in¬ 
dividual color for all orders upon receipt. This 
Notification Card should show the customer’s 
name, order number and other identifying in¬ 
formation and should be forwarded to the Pro- 


197 


Punched Hole Accounting 


duction Department at once, as notification that 
the order is in process of entry. Upon receipt 
of the Notification Card the Production Depart¬ 
ment should immediately place the card on the 
production board in the holder on the extreme 
left side of a control strip. When the regular 
production order has been received, the Noti¬ 
fication Card should be withdrawn and replaced 
by a regular Production Department History 
Card. Notification Cards not replaced by Pro¬ 
duction History Cards indicate that a custom¬ 
er’s order has been received which has not 
been entered on production. 

Locating and Reviewing Orders 

74 

The location and progress of an order can 
be immediately determined by reference to the 
board, as well as the production schedule as¬ 
signed to the order. The last coupon deposited 
indicates that the order has progressed to the 
department or operation number appearing on 
the strip above the next open pocket. 

Orders which are delayed beyond the sched¬ 
uled date, as indicated by the dates appearing 
under each pocket or container, are immediately 


198 


Punched Hole Accounting 

noted with a red ticket, reading “Production 
Delayed.” Orders which have advanced beyond 
the production date are indicated by a green 
ticket, reading “Production Advanced,” and or¬ 
ders on which instructions have been received 
to delay further work are indicated by a blue 
ticket, reading “Stop Order.” 

Flexibility of International Ticketograph Pro¬ 
duction Control 

It will, therefore, be readily apparent that the 
entire subject and status of production and out¬ 
put can not only be reviewed intelligently and 
answers promptly given by the Production Man¬ 
ager as to the progress of any order and its 
probable date of completion, but the executive 
branch of an organization can visualize output 
and the entire subject of production intelli¬ 
gently by a mere glance at these records. 

The use of the Ticketograph on production 
control can be adopted with benefit by either a 
large or small organization. The former can 
readily secure the benefit of a visual display of 
production by using a series of partitions built 
three feet from the floor and approximately four 
feet high, on which the production strips, in¬ 
dicated in the following picture, are attached. 


199 


Punched Hole Accounting 


These partitions should be built in series, with 
approximately four feet of aisle space between 
each, and production strips should be attached 
on both sides of partitions. 

Production strips are furnished in standard 
twelve-pocket lengths, but the number of pock¬ 
ets can be readily increased to any number de¬ 
sired by merely removing the left-hand section 
containing the History Card holder from a strip 
which, when placed with another strip, sup¬ 
plies twenty-four pockets in horizontal posi¬ 
tion. This plan of increasing capacity can be 
continued indefinitely, or in such cases where 
additional pocket capacity is required, standard 
twelve-pocket strips can be used and the first 
strip indicated with a white history card, de 
noting the beginning of the records for the 
order in question. The second strip, which is a 
continuation of the preceding order, is indicated 
by a blue or other distinctive colored history 
card, each succeeding production strip for the 
same order being noted with a blue history 
card, indicating a continuation of the order 
noted with a white history card. This plan, 
as will be noted, can also be continued indefi¬ 
nitely and has advantages over the preceding 


200 


Punched PI ole' Accounting 


one, as it conserves space in such cases where 
the number of operations for the goods manu¬ 
factured, varies. 

Materia] Analysis 

75 

The same Tabulating and Accounting Ma¬ 
chines which are used for preparing payrolls, 
compiling costs and supplying other statistical 
data, supply the quantity and value of mate¬ 
rial used either on job or expense orders, the 
type of the card only being changed. 

The illustration appearing before us shows a 
dual material requisition card. The name of 
this card is representative of its dual use, both 
as an original written record and an account¬ 
ing record which is punched and used for tabu¬ 
lating and statistical purposes. A requisition of 
this nature permits the use of the original 
record for accounting requirements, after which 
it can be filed, and in case of reference for fur¬ 
ther accounting details, the original record, 
upon which all accounting is based, is always 
available. No supplementary or intermediate 
records are used, as the original requisition on 


201 


Punched Hole Accounting 

which goods are delivered is utilized for all 
cost and accounting needs. 

This principle in Punched Hole Accounting 
is probably one of the most advanced practices 
in accounting, as the more frequently the origi¬ 
nal record of a transaction can be used as the 
accounting record, the greater the facility in 
handling details. Further, the elimination of 
each intermediate record or summary assists 
materially in precluding the possibility of errors 
and inaccuracies due to the transposition of 
figures and the loss of contributing papers. 

The illustration indicates the compilation of 
materials used on a specific order, and again, 
instead of supplying only the value of material 
used, we can secure, with the same operation, 
the order number appearing in the first counter, 
the class of material used on a specific order 
which appears in the second counter, and the 
quantity and amount of each class of material 
used which appear in the third and fourth 
counters. The supplementary information ap¬ 
pearing in the second, third and fourth coun¬ 
ters does not, however, retard the work of se¬ 
curing the total amount of all kinds of mate¬ 
rial used on an order which appears in the fifth 


202 


Punched Hole- Accounting 

counter, as all of the figures appearing on each 
separate counter are secured simultaneously 
and with but a single operation. 

Information of this nature permits an in¬ 
telligent review of material costs, and increases 
or variations are readily located. 


Report of Stock Turnover 

76 

The next slide, which is of unusual import¬ 
ance, illustrates a report which is used in either 
a manufacturing or commercial organization 
for maintaining stocks at proper levels suffi¬ 
cient to meet demand, but not in excess of re¬ 
quirements. 

Overstocks incur an economic waste. They 
create a loss, due to depreciation and possible 
obsolescence. 

Insufficient stocks incur a loss, likewise, due 
to inability to meet demands in accordance with 
the requirements of the business. 

This report is one which should be used by 
all concerns that handle either raw materials or 
finished goods. It indicates monthly require¬ 
ments, based on the previous rate of consump¬ 
tion or demand, as well as the requirements for 


203 


Punched Hole Accounting 


the same period of the previous year, giving a 
complete comparison of current conditions with 
those existing during a like previous period. 

The report shows not only the number of 
months stock on hand for both this month and 
the corresponding month of the previous year, 
but the turnover rate, per annum, as well. 

You will notice that the first item specifies 
approximately a six months’ stock on hand, or 
a turnover rate of twice a year, indicating a pos¬ 
sible excess. However, the question of class 
of material and general trade and buying con¬ 
ditions must be considered in conjunction with 
this report, but in many lines of manufacturing 
business an effort is made to operate on a maxi¬ 
mum three months’ stock, or a turnover of four 
times a year, thereby maintaining funds in 
liquid form rather than tying them up in ma¬ 
terials. 

The fourth item on the report shows approxi¬ 
mately a nine months’ stock, or a turnover of 
1.3 per annum. This item is subject, dependent 
upon the kind of material, to not only deprecia¬ 
tion but obsolescence, if of a seasonal type. It 
further incurs a loss, due to handling charges, 


204 


Punched Hole Accounting 

as well as being an investment which is non¬ 
interest bearing. 

The fifth item shows an unsatisfactory con¬ 
dition, as there is but 1.4 months’ stock on hand, 
or a turnover rate of approximately nine times 
a year, indicating the need of immediate pur¬ 
chases and spot deliveries to guard against pos¬ 
sible losses due to short stocks. 

A Report of Stock Turnover assists in keep¬ 
ing funds in liquid form, guards against losses 
due to stocks in excess of current demand, and 
insures sufficent goods on hand to take care 
of normal requirements. The information con¬ 
tained in a statement of this nature, together 
with stock records maintained through the use 
of Electric Tabulating and Accounting Machines 
is, likewise, of direct assistance in regulating 
the amount of insurance coverage, permitting 
a monthly adjustment of insurance in force, 
based on the value and class of material in stock. 

This information is all secured from the same 
cards from which other classes of statistical 
data were obtained, again indicating the un¬ 
limited flexibilty of Punched Hole Accounting 
as applied to Electric Tabulating & Accounting 
Machines. 


205 


Punched Hole Accounting 

The Control of Material 

77 - 78 - 79-80 

The next slide will illustrate the ease and 
simplicity with which one of the greatest fac¬ 
tors which create the hidden losses of a business, 
can be controlled. 

We have a daily cash balance, and deficits in 
cash are immediately discovered, if but for one 
cent, and promptly rectified. Accounts receiv¬ 
able are balanced monthly, overdue accounts be¬ 
ing followed with persistency and every effort 
made to collect the outstanding amounts. The 
many precautions to keep these two factors of 
a business in balance and to guard against pos¬ 
sible losses emanating from them, virtually pre¬ 
clude any cash shortage or shipment of material 
which is not subsequently billed. 

But the item which is of equal value to the 
assets of a business, as are Cash and Accounts 
Receivable, but which incurs annually a loss far 
beyond that which would be tolerated from any 
other element of the operations of a concern, 
is Material. The material deficits are the hid¬ 
den losses of a business, occasioned by material 
shortages and inventory deficits, which often 
consume considerable of the profits of a going 


206 


Punched Hole Accounting 

concern. Such losses will accrue until the end 
of the year unless properly controlled and will 
only appear when inventories are taken and 
books are closed, with a resultant unfavorable 
effect upon the profit and loss account. 

The slide appearing before you shows a sim¬ 
ple but accurate method for controlling material, 
through the use of Electric Tabulating and Ac¬ 
counting Machines, with the further assurance 
that stock records will balance with ledger ac¬ 
counts. 

You will notice, from the slide, that the plan 
of controlling material is built on basic princi¬ 
ples. Separate cards are used, representing the 
three factors which enter into a balance, the old 
balance being carried forward, receipts added 
and disbursements deducted. Electric Tab¬ 
ulating and Accounting Machines make these 
additions and deductions, through the use of 
complements, automatically, and supply, sim¬ 
ultaneously, the class of material, the quantity 
of materials received, the quantity disbursed, 
and the balance, in both quantity and value, of 
material on hand. This information can be 
copied direct from the machine or supplied in 
printed form through the use of the Electric 


207 


Punched Hole Accounting 

Accounting Machine and recorded on stock 
records from the printed sheets. 

The accounting record, which is used as a 
material requisition form as well, and the stock 
record, are inserted in the Punch together and 
punched simultaneously. The accounting rec¬ 
ord is used to make up credits to ledger accounts 
as well as for compiling costs and supplying 
other statistical data, the stock record copy, as 
indicated by the next slide, being used for main¬ 
taining a correct record of material on hand. 

It will, therefore, be noted that the credit to 
the stock record and the credit to the general 
ledger account are secured from virtually the 
same set of records, assuring the complete ac¬ 
curacy and uniformity of stock records and 
general ledger balances of raw materials, parts, 
finished stocks and expense supplies. 

The control of material, through the use of 
Electric Tabulating and Accounting Machines, 
permits a monthly balance of stock records, by 
merely accumulating the value of material on 
hand appearing in the balance column of the 
various stock record accounts, with gen¬ 
eral ledger balances, as the various debits and 
credits in the general ledger accounts were ob- 


208 


Punched Hole Accounting 

tained from duplicates, prepared simultaneously, 
of the records used in securing the balance of 
material on hand, as indicated by the stock 
records. 

Variations between stock records and general 
ledger balances, therefore, would be immediately 
noticeable at the end of each month, just as 
differences are found at present in Accounts 
Receivable or other ledger accounts when 
monthly trial balances are taken. 

The proper control of material, which repre¬ 
sents the same dollar and cent value as Accounts 
Receivable, is essential, and the use of Electric 
Tabulating and Accounting Machines for this 
purpose assures uniformly accurate stock rec¬ 
ords which are in agreement with ledger bal¬ 
ances. 

The following slide will illustrate the ease 
with which complements can be punched. It is 
unnecessary to figure the complement of an 
amount as the red or lower portion of the keys 
indicate the complement, or credit, to an ac¬ 
count. Complements on Tabulating Cards can 
be immediately read through the special ar¬ 
rangement of the fields which have been 


209 


Punched Hole Accounting 

punched in complement, but the holes, through 
the use of complement keys, have been properly 
located and punched for automatic deduction. 

Inventory Simplified 

81 - 82 - 83 - 84 - 85-86 

The former slides indicate how a balance of 
stock records and general ledger accounts can 
be maintained through the use of Electric Tabu¬ 
lating and Accounting Machines. There is a 
further element, however, in protecting profits 
from needless losses, which necessitates the ad¬ 
option of methods which will assure the main¬ 
taining of stock records that check with bin 
stocks or, in case of difference, that the shortage 
or overage of an item will be disclosed and recti¬ 
fied before the end of the year, thus protecting 
inventories from unexpected shrinkages. 

However, to assure the agreement of stock 
bin counts or inventories with stock records, 
the latter reflecting the amount of material on 
hand, which is in agreement with general ledger 
balances, an effective but simplified method is 
essential. 

The next slide will indicate an inventory card 
which is used for either annual inventories or 


210 


Punched Hole Accounting 

periodical counts throughout the year. These 
counts rotate constantly, a different group or 
class of material being counted at regular pe¬ 
riods and the total value of the group invento¬ 
ried is checked with the total value of material 
on hand, as indicated by the corresponding stock 
records. If the total for the group of material 
inventoried equals the total of the amounts ap¬ 
pearing on the stock record cards, this portion 
of the stock is naturally in agreement with the 
general ledger accounts, as the stock record 
cards are balanced monthly with the general 
ledger. 

If the rotating or periodical count, which is 
made daily, or at stated periods, for different 
groups or classes of material, does not agree 
with the stock record cards, the difference 
should be located at once and ledger accounts 
adjusted for the deficit or excess which, if not 
done, will result in a difference in the inventory 
at the close of the year. 

Stock records maintained through the use of 
Electric Tabulating and Accounting Machines, 
are balanced monthly with ledger accounts, but 
with far less effort than is required to obtain a 
trial balance, and any difference in bin stocks 


211 


Punched Hole Accounting 

with stock records, under this plan of simpli¬ 
fied material accounting, is reflected at once. 

You will notice that the inventory cards are 
numbered. This number is applied in advance 
of their use for recording inventory accounts by 
the stock clerk, who is charged for a specific 
series of cards, and upon their return, regard¬ 
less of the order in which they are received, they 
are arranged in numerical sequence by the 
Sorting Machine as the card serial number is 
punched, and all cards must be accounted for, 
.with either properly filled in cards or by the re¬ 
turn of blanks. 

Four digits of the serial number are punched 
in the first field and the first, or unit number, 
is punched in the 45th column on the card. This 
division of the serial number is made in order to 
simplify the preparation and handling of the 
cards, as the part of the serial number in the 
first field is Gang Punched and the unit number 
is Key Punched individually in the last column, 
making it necessary to move the carriage back 
but one space in order to place it in proper 
punching position for the first or unit digit; 
whereas, if the entire serial number was in- 
chided in the first field on the card, including the 


212 


Punched Hole Accounting 

unit or digit 5 of the serial number appearing 
before you, it would be necessary to return the 
carriage virtually the full length of the Punch. 
However, if it is preferred to combine serial 
numbers, either method can be followed with 
equal success. 

Please note that all of the accounting data 
for inventories and the closing of the books at 
the end of the year, as well as the essential in¬ 
formation to check stock records throughout 
the year, is shown on this card. The quantity 
appears in the 7th field, consisting of six digits 
or sufficient space to record quantities up to an 
amount of 999,999. The 8th field has been 
assigned to punch the unit cost of the item, 
and the 9th field the unit burden cost, but 
it will be noted that no provision is made for 
punching the value of material. 

Before proceeding, please refer again to the 
7th or quantity field. All materials, whether re¬ 
ported by count, pounds, ounces, yards, feet or 
miles, are punched in this column without re¬ 
ferring in any way to the unit of measurement 
or indicating whether the quantity refers to 
ounces or miles. 

The following slide will illustrate the group 


213 


Punched Hole Accounting 


extension method of securing results through 
• 

the use of Electric Tabulating and Accounting 
Machines, indicating a comparison of extend¬ 
ing dozens, gross and feet, by the individual 
method as compared with the digit method of 
group extensions. Please note that through 
the digit process of making extensions, an ad¬ 
ditional zero is merely added for the tens col¬ 
umn, two additional zeros for the hundreds col¬ 
umn and so on, the rule of multiplication 
being followed of moving one space to the 
left. While the figures appearing before you 
on the slide for the three problems would ap¬ 
parently indicate approximately the same num¬ 
ber of figures as if done manually, the saving, 
however, is almost beyond comprehension, as 
the figures noted under the group extension 
method are merely indicative of the factors and 
computations which are handled by these ma¬ 
chines in their own way. 

The next form will indicate how inventory ex¬ 
tensions, regardless of unit or measurement or 
number of items, can be reduced to but nine 
extensions, whether made up of one thousand 
or one hundred thousand items. There can 
never be more than nine extensions on a digited 


214 


Punched Hole Accounting 

inventory, through the use of Electric Tabulat¬ 
ing and Accounting Machines. 

The form appearing before you is known as 
an Inventory Digit Sheet. Either the quanti¬ 
ties or unit prices are digited by sorting them 
in numerical sequence, one column at a time. 
For instance, if prices are digited, the unit price 
or cost column, which, you will recall, was the 
8th field on the inventory card previously illus¬ 
trated, is arranged in numerical sequence at the 
rate of 250 cards a minute, at which speed, re¬ 
gardless of the size of the inventory, cards can 
be quickly arranged in proper order. The cards 
for prices which end with a cipher in the unit 
price field, are then tabulated for quantity of 
material and the total quantity is noted in the 
zero space opposite the first sort. The same pro¬ 
cedure is followed for the prices which end with 
“1” in the unit price field, the quantities being 
accumulated and the total inserted opposite the 
first sort in the “1” section of the digit sheet. 
This procedure is again followed for the cards in 
which “2 ;> appears in the unit price field, the 
quantity being inserted opposite the first sort 
in the “2” section of the digit sheet. 

After all cards have been tabulated for each 


215 


Punched Hole Accounting 


of the nine digits appearing in the unit price col- 
amn, they are again re-sorted and arranged in 
numerical sequence for the tens column of the 
unit price, and all the cards with a zero appear¬ 
ing in the tens or second position of the unit 
price field are tabulated and the quantity shown 
opposite the second sort of the zero section of 
the digit sheet. The cards in which “1” appears 
in the tens position of the unit price field are 
tabulated for quantity and the total entered op¬ 
posite the second sort in the section of the digit 
sheet with “1” appearing in front of it, the 
same procedure being followed for all digits in 
the price field. 

The foregoing gives merely a brief outline of 
a highly scientific principle of group extensions, 
as applied to Electric Tabulating and Account¬ 
ing Machines. While it may be somewhat diffi¬ 
cult to mentally follow the principle of group 
extensions, there is, in reality, but little manual 
effort needed as the machines do virtually 90% 
of the work, which reduces inventory compu¬ 
tations to but nine extensions. 

The digit sheet appearing before you is made 
up to take unit prices equivalent to tens of thou¬ 
sands, or which would equal a unit cost of 


21G 


Punched Hole\Accounting 

$999.99, but digit sheets for increased prices 
can, however, be readily prepared by merely the 
addition of extra sorts or lines. 

After the cards have been sorted for all of 
the digits appearing in each column of unit 
prices, the figures appearing in the zero section 
of the digit sheet are then totaled, the same 
procedure being followed for the first, second 
and all the remaining sections, after which total 
figures in each section are multiplied by the 
digit appearing in the column on the right side 
of the sheet immediately preceding the amount 
column. The total extensions for the nine digits 
added together and inserted under “Grand To¬ 
tal All Digits” will, as previously stated, regard¬ 
less of the size of the inventory, give the total 
inventory value of material at hand. 

The accuracy of the footings for each digit 
or section which is extended into money value, 
is verified by accumulating the total of each 
“sort,” which is supplied by the Tabulator and 
obtained at the same time that the quantities 
for the sort of an individual digit are secured. 
When the tabulation of an individual sort for 
the 9th digit has been completed the grand total 
of all digits for the specific “sort,” which has 
been tabulated, is inserted opposite the number 


217 


Punched Hole Accounting 

of the “sort” in question under “Control.” This 

% 

same procedure is followed for all digits and 
after the cards for the last digit and last sort 
have been tabulated and posted in the “Con¬ 
trol,” the latter is footed and the total noted 
opposite “Grand Total All Sorts.” The figures 
appearing opposite “Total” for each digit are 
then accumulated and the total for all the digits 
is noted opposite “Grand Total All Digits,” the 
agreement of the totals appearing under “Grand 
Total All Sorts” and “Grand-Total All Digits,” 
indicating the absolute accuracy of the figures 
which have been transposed into inventory 
values. 

The periodical or rotating counts for verify¬ 
ing stock bin balances are digited as readily as 
are annual inventories, and the total value of 
material on hand is secured in a simple and me¬ 
chanically accurate manner without following 
the time-consuming process of making individ¬ 
ual extensions which usually calls for extra ef¬ 
fort on the part of various clerks and generally 
results in additional expense or more or less de¬ 
lay in the handling of current work. 

Inventory counts which are recorded on 
sheets can be digited with equal success, the 
same procedure being followed, as outlined 


218 


Punched Hole'Accounting 

before, but a card, similar to the one appearing 
on the next slide, is punched direct from the 
inventory sheet. 

The following slide will show a combined in¬ 
ventory digit sheet for work in process. The first 
column shows the digited value for labor and 
material and the second column for burden. 
The total value of labor expended and material 
used is secured with but nine extensions, regard¬ 
less of the number of jobs in process. If it is 
desired to separate labor and material, a digit 
sheet with three columns can be readily used 
with equal success. The same number of ex¬ 
tensions will supply the amount of labor in¬ 
cluded in work in process, and nine extensions 
each for material and burden will give the sum 
of each. 

It will, therefore, be noted that regardless of 
the number of items on an inventory, the digit- 
ing principle of securing inventory values, 
through the use of Electric Tabulating and Ac¬ 
counting Machines, supplies closing figures at a 
correspondingly earlier date than would be pos¬ 
sible if each item were extended and verified. 
The use of the digit principle of group exten¬ 
sions eliminates an economic waste and an un- 


219 


Punched Hole Accounting 

necessary delay and supplies mechanically ac¬ 
curate results. 

The next slide will illustrate an Inventory Dis¬ 
count Digit Sheet, the same procedure being 
followed, but instead of reducing prices to a 
net basis, list prices and discounts can be used 
for pricing inventories and Tabulating Cards 
sorted to discount rates, segregating all cards 
with the same rate of discount, after which the 
cards for each like rate of discount are digited 
and the total list value of material secured, fol¬ 
lowing which the discount in total, for each rate 
of discount, is deducted as indicated in the lower 
right hand section of the sheet. 

As previously stated, units of measurement 
are not segregated into their respective or dis¬ 
tinctive classes, and prices which are based on 
fractional cost are merely transposed into their 
decimal equivalent. Unit cost may be carried to 
as many places beyond the decimal point as de¬ 
sired, and the use of decimals in either price or 
quantity, or both, will not increase the number 
of extensions, as, regardless of the number of 
items to be extended, the maximum will never 
exceed nine for any class of analysis. 

The plan of group extension, while referred 


220 


Punched Hole Accounting 

to specifically here in connection with inven¬ 
tories is, however, not limited to this one use, 
but it can be applied to any class of work where 
many items of computation are required to se¬ 
cure a result. 

In general, the rapidity and flexibility of the 
digit plan is so great that it can hardly be con¬ 
sidered a system but more nearly a scientific 
accomplishment, when used in conjunction with 
Electric Tabulating and Accounting Machines. 

Weighing Devices Which Assure Accurate 
Costs and Records 

There is another Division of the Internation¬ 
al Business Machines Corporation, which will 
no doubt be of general interest, and which is 
also a pioneer in its line—the Dayton Scale 
Company, the originators of weighing machines 
which compute the value of the product as well 
as supply the weight. 

Counting and Computing Scale 

87 

The next slide will indicate the Counting and 
Computing Scale, which has a capacity for 
weighing and computing materials up to 110 
pounds. It has a range of thirty-three different 


221 


Punched Hole Accounting 

prices, and charts can be supplied in various 
price ranges, as required. 

The machine appearing before you operates at 
a ratio of 20 to 1 and supplies a dual purpose, 
as it not only weighs products, but a limited 
quantity counted and placed in the right hand 
scoop makes possible the distribution of ma¬ 
terial by count, as well, as one article in the 
scoop is equal to twenty on the platform of the 
scale, the balancing of the beam indicating that 
the material on the platform is in direct ratio, 
by count, with the quantity in the scoop. 

For illustration, if it is desired to distribute 
500 washers, and 25 washers are counted and 
placed in the scoop, when the scale balances it 
indicates that the correct number of washers, 
or, in this case, that 500 washers are on the plat¬ 
form of the scale. 

If 100 washers are placed in the scoop, when 
the scale is in balance it will indicate that 
twenty times 100 washers are on the scale, or 
that 2,000 washers have been counted out, but 
instead of doing so numerically, the quantity is 
obtained, to an absolutely accurate degree, 
through the weighing process. 

A scale of this nature assures accurate costs 
222 


Punched Hole Accounting 


and supplies records which are correct, at a 
great saving of time and labor. It eliminates 
the many possibilities of error through a num¬ 
erical count of articles which are required in 
large quantities. It also supplies equal accuracy 
for more valuable products which are used in 
smaller numbers but the relative value of which 
is greater, and is of special value in taking in¬ 
ventories of goods in bulk which are reported 
and priced by count. 

The use of this machine, which operates on a 
dual basis, is an essential in manufacturing 
plants and distributing organizations. It means 
the more rapid delivery of materials and sup¬ 
plies from storerooms and the protection of 
stocks from losses due to inaccuracies in count 
without, however, interfering with its use as a 
scale, as by merely removing the counting de¬ 
vice scoop and attaching the weights it is im¬ 
mediately transformed into a scale weighing 
pounds and ounces. 


223 


Punched Hole Accounting 

Heavy Duty Scale 

88 

The next slide illustrates the Heavy Duty 
Scale, which can be furnished in various capaci¬ 
ties of from 300 pounds to 65,000 pounds and is 
used in Receiving- and Shipping Departments as 
well as in various sections of manufacturing 
plants. The value of a machine of this nature 
and its relative importance to businesses of all 
kinds, needs no elaboration and is fully apparent 
when it is realized that all materials used in 
commercial activities of every nature, whether 
structural steel, automobile, brick, cement, 
household furnishings, machinery, raw materi¬ 
als, consisting of vegetable, animal or mineral 
matter, wearing apparel or foodstuffs, are, at 
some period of handling or in the process of 
converting them into finished products, weighed 
one or more times. 

This scale is fully automatic and eliminates 
the need of adjusting weights. It can be sup¬ 
plied in either the platform type, as indicated 
on the slide, or set in flush with the floor. The 
dial is sufficiently large to permit the quick 
reading of weights, and close registrations are 
eliminated, which result in possible errors and 
delays in handling of goods. 


224 


Punched Hole Accounting 

Porcelain Scale 
89 

The next slide will indicate another product 
made by the Scale Division of this Company, 
and shows a Porcelain Scale. The finish is dur¬ 
able and of the same material as used on other 
high grade porcelain products. 

The machine appearing before you is adapt¬ 
able for use in all retail establishments where 
weighing is one of the requirements of the busi¬ 
ness, and is supplied in models with weight ca¬ 
pacities of 15, 20, 24 and 30 pounds. 

The upper, or cylinder, portion of the scale 
contains the computing mechanism which auto¬ 
matically computes the amount for a certain 
weight at a specified price, and has a range of 
from 32 to 35 different prices, weighing in grad¬ 
uations of ounces and pounds. Charts can be 
supplied in various price ranges to meet the in¬ 
dividual requirements of each business. 

Dayton Scales are virtually indestructible and 
the finish of the Porcelain Scale appearing be¬ 
fore you will last as long as the mechanical con¬ 
struction itself. 

The devices which have been referred to are 
but a few of the many manufactured by the Day- 


225 


Punched Hole Accounting 


ton Scale Division. The labor-saving, profit- 
protecting Dayton Products include various 
models of Counter Scales, Meat Slicers, Meat 
Choppers, Coffee Cutters, Cheese Cutters and 
Bread Slicers for retail stores, and weighing ma¬ 
chines for manufacturing concerns, shipping 
rooms and Parcel Post uses. This Division of 
our business offers the user of Dayton Products, 
and the buyer whose purchases are han¬ 
dled with the aid of Dayton Machines, mutual 
protection, and it is equipped to take care of the 
many weighing requirements which exist in all 
lines of wholesale, retail, manufacturing, finan¬ 
cial and commercial activity. 

Customers and Geographical Sales Analysis 

90 

The illustration appearing before us shows 
two of the many classes of statistical data 
which can be obtained from a Tabulating Card 
on which sales facts have been recorded. The 
series of upper counters illustrates a geogra¬ 
phical analysis of sales. The customer's num¬ 
ber appearing in the fifth field on the card is in¬ 
dicated in the first'counter; the County and 
State numbers in the second counter appear in 
the sixth and seventh fields; the class and sub- 


226 


Punched Hole Accounting 

class in the third counter appear in the twelfth 
field; the amount of sales in the thirteenth field 
is accumulated in the fourth counter, and the 
total sales for all customers in a specific County 
or State appear in the fifth counter. 

As will be noted, we are not only securing 
the sales for each specific customer, by location, 
together with the kind of goods sold, but we 
obtain, at the same time, without further ex¬ 
pense or any additional summarizing, the total 
sales made in a specific geographical division. 

Analysis of Sales and Profits by Salesmen and 
Classes 

This same card, by merely re-sorting can 
then be used to compile the sales by sales¬ 
men, as indicated by the lower series of count¬ 
ers, showing the kind of goods sold, the selling 
price and cost of each, from which the amount 
of gross profits for a salesman can be readily 
secured, either in total or for a specific line or 
class of goods, together with the total sales of 
all salesmen for all goods sold. This informa¬ 
tion is all obtained simultaneously with the tab¬ 
ulation of the last card. Please notice that 
while results of a general nature are being se¬ 
cured, the machine is accumulating and making 


227 


Punched Hole Accounting 

available a volume of statistics and data, in ad- 
% 

dition, which it would be impracticable to se¬ 
cure manually. 

Basic Record From Which Tabulating Cards 
Are Punched 
91 

The next slide will illustrate the ease with 
which written records, transposed into numer¬ 
als, are recorded on Tabulating Cards by means 
of Punched Holes. 

The form appearing on the upper part of the 
illustration is the Bookkeeping and Accounting 
Department copy of the invoice rendered to 
the customer. The fields on the card, you will 
notice, are arranged in the same order as is the 
written information appearing on the bill, there¬ 
by permitting the recording of data on the Tab¬ 
ulating Card, appearing on the lower section of 
the slide, in the same sequence as it appears on 
the invoice. 

Code numbers for the various classes of writ¬ 
ten information that are to be transposed into 
numerals are maintained in simplified form, 
usually on either index cards or visible index 
files, and are noted on the Bookkeeping and Ac¬ 
counting Record, the Punch Operator punching 


228 


Punched Hole Accounting 

a card for each different class of material in¬ 
cluded on an invoice. After Tabulating Cards 
are punched the records are released for post¬ 
ing or filing, and the cards, after being verified 
with each day’s billing, are retained in file in 
proper order until the close of the month or 
period when statistical reports are compiled. 

The illustration appearing before us indicates 
the simplicity of preparing Tabulating Cards 
and the ease and rapidity with which an al¬ 
most unlimited number of different classes of 
statistical reports and statements can be se¬ 
cured, through the use of Electric Tabulating 
and Accounting Machines. 

Analysis of Sales and Quotas by Salesmen 

92 

Sales activities, to be productive, should be 
based on the potential buying power of each 
salesman’s territory. The statement before us 
indicates the buying power of the various ter¬ 
ritories, as shown by the column headed 
“Quota.” 

The quotas cover the estimated purchasing 
power of a territory for a month and are cum¬ 
ulative, as indicated on the right hand side of 
this statement. 


229 


Punched Hole Accounting 

The subject of sales quotas, which are na¬ 
turally based on the products of a concern, is 
one which has been given more or less attention 
by almost all classes of business, and many or¬ 
ganizations of national prominence have adopted 
a sales quota or potential buying power plan of 
operation. 

Referring again to the report before us, the 
amount of sales for each salesman is indicated 
in the first and third columns on the report, 
covering both a monthly and a cumulative 
period. As all quotas for each salesman’s ter¬ 
ritory are based on the same factors, the sales 
and quota results for each salesman are, there¬ 
fore, fully comparable and readily indicate the 
producing and non-producing territories. Here¬ 
tofore, the high salesman was considered the 
leading salesman, but under the quota plan of 
operation the fact is brought out that the sales¬ 
man who does not send as many dollar and 
cent orders in to the house may be a better pro¬ 
ducing salesman than one whose sales show a 
greater amount. This is illustrated in the case 
of the second salesman on the report before us, 
who shows sales of but $6,251.72, but whose 
quota yield is 104.2% for the month and 71.2% 
for the elapsed period of the year. 


230 


Punched Hole Accounting 

Salesman Number 5 on the report, however, 
shows greater dollar and cent sales, amounting 
to $13,409.86, but a yield of only 74.5% of the 
potential business in that territory was secured 
for the month and 64.8% for the elapsed period 
of the year. 

Salesman Number 12 shows an excellent con¬ 
dition with 129.9% yield for the month and 
103.1% for the cumulative period. 

Where analyses of this nature are not made 
and progress is determined on a basis of sales 
totals only, lost business is liable to result and 
accrue without a realization of this condition, 
as the losses in one territory may be offset by 
increases in others, but a report of this nature 
will permit intelligent comparisons, and changes, 
where conditions warrant, will be based on 
facts. 

Analysis of Sales-Expenses and Profits by 
Salesmen 

93 

The Sales Analysis Card, which was previ¬ 
ously illustrated, among many other headings, 
showed one reading “Salesman.” 

The copy of the report appearing before us 
was secured from that card merely through the 


231 


Punched Hole Accounting 

re-sorting and re-arranging of the two columns 
of numerals appearing under this heading, and 
is a report of. unusual importance, whether 
three salesmen or three thousand salesmen are 
employed. The information supplied on this 
statement is condensed, but in sufficient detail to 
indicate not only who the sales producers are, 
but who the gross profit producers are, as well 
as who the spenders are and who the salesmen 
are who produce net profits from which divi¬ 
dends are paid. 

Viewing sales ability from either a gross or 
net sales viewpoint is a dangerous expedient 
and makes possible the arriving at many wrong 
conclusions. 

The first salesman appearing on the report 
before you shows gross sales of $21,416.83, lead¬ 
ing the entire organization. His net sales, like¬ 
wise, are in excess of any individual appearing 
on this report. But if conclusions were based 
on either gross or net sales, this salesman would 
be considered a good man and a producer, as 
well. However, an analysis of his operations 
indicates that the returns and allowances in his 
territory amount to more than 25% of his gross 
business, necessitating a double handling cost 
as 25% of the goods shipped on his orders were 


232 


Punched Hole Accounting 

returned, incurring a receiving and re-stocking 
cost. 

A further review indicates that the third 
salesman on the list, while having sold only 
$15,753.81 worth of material, had a return and 
allowance loss of but 7%, and his net sales 
amounted to $14,593.60, or without considering 
the element of profit or cost of selling, while this 
salesman’s gross sales were less than the first 
man, the cost of handling his orders was lower, 
due to the fact that the goods he sells stay 
sold to a proportionately greater degree. 

However, again referring to the first sales¬ 
man, we find that his gross profits average 
28.2%, which is lower than that of any other in¬ 
dividual. The third salesman shows a gross 
profit rate of 37.4%, indicating, again, that the 
volume salesman is not always the profit pro¬ 
ducer, as in this case the first individual is ap¬ 
parently selling the leaders or items which are 
in constant demand but which carry a low rate 
of profit. 

To continue the comparison, the selling cost 
of the first individual is 11.4%, which is higher 
than some of the salesmen listed but not in 
excess of others. The third salesman shows a 
high selling cost as compared with others, but 


233 


Punched Hole Accounting 

his rate of gross profit is such as to possibly 
warrant additional expenditures, due to the class 
of goods which he handles. 

The net profit rate is indicative of the impor¬ 
tance of a statement of this kind, as the sales¬ 
man appearing on the first line, who is the leader 
in both gross and net sales is one of the lowest 
on the list for net profit rate with but 16.8%. 
The third salesman, even with high expenses, 
produced a net profit rate of 23.8%. 

A constant comparison of these figures is il¬ 
luminating and shows a condition which it is 
important for a sales executive to be fully cog¬ 
nizant of. 

Electric Tabulating and Accounting Machines 
make a report of this nature possible and they 
assist in guarding against the continuance of 
unnecessary losses which are not known and 
cannot be discovered if totals only are used to 
determine the efficiency of a sales organization. 

Analysis of Sales by Salesmen and by Princi¬ 
pal Classes of Merchandise 
94 

One of the preceding reports indicated total 
sales, by departments or classes of material. 
The Tabulating Card which supplied this report 


234 


Punched Hole Accounting 

likewise furnished the information for the re¬ 
port which appears before you. It merely meant 
that after having secured the information for 
the previous report, the cards were re-sorted 
for classification and re-tabulated, indicating 
the kind of business done by each salesman. 

You will remember, in reviewing the analy¬ 
sis of Sales-Expenses and Profits by Salesmen, 
the first salesman showed an exceedingly low 
profit rate. This report, in turn, will indicate 
the kind of material which made up the sales 
of this individual, as well as permit a review of 
the kind of business done by each salesman, 
showing immediately the classes of material 
which a salesman does not sell or sells only in 
limited amounts. 

Report of Average Sales by Salesmen 

95 

The volume of sales is an important factor 
in any business, but one of equal importance is 
the number of transactions making up the vol¬ 
ume credited to any one salesman. A fair 
or satisfactory volume of sales from a specific 
territory, where possibly a number of large 
industries or distributors are located, may in¬ 
dicate an encouraging amount of business but 
235 


Punched Hole Accounting 

the results would not necessarily indicate a 
satisfactory number of orders. 

A report, such as the one appearing before 
you, would not only supply the amount of busi¬ 
ness done by each salesman but would, in ad¬ 
dition, indicate the number of sales made and 
the average amount of each order or sale, both 
the volume of sales and total number of orders 
being secured with but a single operation of 
the machine. 

To illustrate the value of a statement of this 
kind please note the first item appearing on the 
report, which shows 21 orders, or an average 
of $255.85 per sale for the current month, as 
compared with a total of 176 sales for the 
elapsed period of the year, or an average of 22 
per month; the value of each order, however, 
indicates an average increase of approximately 
44% or $77.90 for the current month. 

The fourth item on the report shows 33 ordei s 
or an average of $156.72 per sale for the cur¬ 
rent month, as compared with a monthly aver¬ 
age for the elapsed period of the year of 23 
orders and $250.32 per sale, or a decrease of 
37.4% for each sale. From a distribution view¬ 
point, while the territory is being covered more 
effectively than the figures for the elapsed pe- 


236 


Punched Hole Accounting 


riod of the year would indicate, the sales se¬ 
cured, however, indicate a non-buying condition 
among some of the larger customers called on 
by this salesman, making an investigation es¬ 
sential to determine the cause for the lesser 
amount of business secured, per average order, 
than heretofore, and whether the decrease is 
general in the whole line or only in some of the 
goods carried. 

The factors previously referred to would not 
be known, nor would they be available, without 
the information appearing on this report, which 
is secured from the same set of cards from 
which the data was obtained for the other sales 
reports. 

Report of Sales by Classes of Materials 
96 

After analyzing sales on a basis of yield, by 
salesmen, as indicated by the previous slides, 
the same Tabulating Cards from which these re¬ 
ports were secured are used repeatedly to pro¬ 
vide different viewpoints of the same subject, 
permitting a review of operations from various 
angles, thereby supplying a further detailed 
knowledge of the business. 

A concern that handles numerous articles is 


237 


Punched Hole Accounting 

invariably in a better relative position if dis¬ 
tribution is based proportionately on all of the 
goods which they carry in stock, rather than if a 
preponderance of their business covers a few 
items. In the latter event, a slackening of de¬ 
mand of the big seller has an immediate adverse 
effect, but a limiting of the demand of any one 
article, where distribution is divided on a pro¬ 
portionate basis, still allows a reasonable vol¬ 
ume of business for the remainder of the line 
which is not affected. 

An analysis of sales, either by principal items, 
by classes or by departments, can be readily ob¬ 
tained in conjunction with the report appearing 
before you. These sales facts are all supplied 
by merely using existing records, and are ob¬ 
tained through the use of Electric Tabulating 
and Accounting Machines, again indicating the 
almost unlimited flexibility of the Punched Hole 
System of Accounting, which supplies informa¬ 
tion immediately or permits the storing of data, 
without additional work, for use when needed. 


238 


Punched Hole"Accounting 

Analysis of Sales by Profit Rates and Principal 
Classes of Merchandise 

97 

Maximum business at minimum profit rates, 
where more than one grade of like goods carry¬ 
ing increased profit rates is handled, is a need¬ 
less loss. A study of sales, by classes of ma¬ 
terials only, does not show the volume of goods 
at varying rates of profit. 

The report appearing before you indicates 
another viewpoint in sales management which is 
essential—the grouping of goods, by classes of 
materials carrying a like rate of profit, into one 
profit class. This grouping can be done quickly 
and readily by the Sorting Machine, the sales 
made at the same rates of profit being automati¬ 
cally brought together and arranged in proper 
sequence at the rate of 250 items per minute. 
The profit rates, however, in place of being speci¬ 
fied on price sheets, are merely indicated in a 
letter code which is transposed to a numeral 
when it is punched on the card, “A” represent¬ 
ing 15%, “B” representing 20%, etc., thereby 
maintaining a confidential record of profit rates. 

Please note the first item on the attached re¬ 
port shows that approximately 38% of the total 


239 


Punched Hole Accounting 


business for the month carried a 15% rate of 
profit, and approximately 64% of the total sales 
covered material with profit rates of 25% or 
less. 

Class 4 indicates that approximately 70% of 
the goods sold were at the low profit rate, not¬ 
withstanding the fact that the same class of 
goods carrying a higher rate of profit, as indi¬ 
cated by “G” and “H” rates, were available, 
although sold in but comparatively small 
amounts as compared with the volume of the 
low profit'bearing sales. 

The profit rates and code specified can na¬ 
turally be varied to meet the individual require¬ 
ments of a business, and instead of a 5% step 
between rates, they can be graduated in accor¬ 
dance with the requirements of each business. 

These figures show, in a simple and concise 
manner, the importance of a statement of this 
nature, which enables the general sales organiza¬ 
tion to work intelligently for sales of higher 
profit-bearing merchandise, encouraging the 
featuring of the “F,” “G,” “H” and higher 
profit line of goods with the field force. 

A further analysis of the same Tabulating 
Cards from which this report is compiled, can 
be secured to indicate the total sales by sales- 


240 


Punched Hole Accounting 

men for each rate of profit, or a detailed analy¬ 
sis can readily be obtained, showing the kind 
and amount of goods sold, at each rate of profit, 
by each salesman. 

An effort to increase profits through featur¬ 
ing higher profit-bearing merchandise can 
neither affect a business adversely nor retard 
its growth, but the effort will, instead, increase 
the net profits of a concern as well as increase 
the standard and selling ability of the sales or¬ 
ganization through the featuring and selling 
of goods which call for the purchase of an article 
at a higher cost, resulting in greater volume, 
due to the higher price of goods sold and in¬ 
creased profits, on account of the increased profit 
rates at which sales are made. 

Report of Advertising Costs and Sales 

98 

The next slide illustrates a report which 
should be reviewed with exceptional care, as it 
supplies the yardstick for measuring advertis¬ 
ing results as compared with advertising costs. 
While this report is one of the unusual statisti¬ 
cal statements which can be readily secured with 
comparative ease through the use of Electric 
Tabulating and Accounting Machines, the in- 


241 


Punched Hole Accounting 


formation, however, was supplied by the same 
records from which the other sales reports were 
obtained. 

The average period of time during which 
the sales producing power of an advertisement 
is retained, is determined and adopted as a 
standard for either materials or for depart¬ 
ments. For illustration, if a department store 
advertisement, covering an individual product, 
creates a three-day demand, or there is a call 
but in a diminishing amount, for the goods in 
question, for three days after the advertisement 
appears, the sales representing the normal 
amount of business secured prior to the adver¬ 
tisement would be inserted in the first column. 
The sales for the three succeeding days would 
be inserted in the second column. The differ¬ 
ence between these two columns would, if the 
latter is in excess, be a credit to the Advertising 
Department, and the cost of the advertisement 
would be indicated in the fourth column. The 
excess sales credited to the Advertising Depart¬ 
ment, computed at gross profit rates, when com¬ 
pared with the cost of advertising, will indicate 
the amount of profits earned from increased 
business resulting from advertising. 


242 


Punched Hole Accounting 

We will assume that the average profit rate 
for the department covered by the first item is 
33 1 1 a%. Please note that the comparison of ex¬ 
cess sales credited to the Advertising Depart¬ 
ment for the elapsed period of the year, as 
indicated in the fifth column, and the cost of 
advertising, appearing in the sixth column, 
shows an expenditure of approximately $2,300.- 
00 in excess of the anticipated profits produced 
during the period of the advertisements. The 
second item, however, presuming that the same 
average rate of profit applies to the goods sold 
by this department, indicates that the amount 
of additional business more than paid for the 
cost of the advertisement and showed an excess 
of approximately $1,800.00 profit. The third 
item, based on the same profit rate, showed a 
profit of only $25.00. The fourth item, at 
the same rate of gross profit, produced $460.00 
in excess of advertising expenses, due to the in¬ 
creased business secured as a result of the ex¬ 
penditure. 

Please keep in mind that we are dealing with 
direct factors in this report, and its importance 
can be readily appreciated by reviewing the 
last item which shows excess sales of $3,893.54 


243 


Punched Hole Accounting 


credited to the Advertising Department as a re¬ 
sult of advertising. These sales, based on a 
33 l /i% rate, yielded profits of approximately $1,- 
298.00, and the cost of advertising these same 
goods amounted to $2,907.63, incurring a gross 
loss of $1,609.63. 

These losses which are difficult to locate, can 
be readily determined through the use of Elec¬ 
tric Tabulating and Accounting Machines and 
a report of this nature permits an intelligent 
review of the results realized by the Advertis¬ 
ing Department. 

Analysis of Branch Sales and Profits 

99-100-101 

The report which appears before you is one 
which deserves undivided attention as, upon 
careful study, you will appreciate the unusual 
kind of information it contains, all of which is 
obtained through the use of Electric Tabulating 
and Accounting Machines from the same records 
from which various other statements, previously 
referred to, were compiled. 

A statement of this nature is invaluable and 
ranks in importance with the balance sheet of a 
business, and is of unqualified value in such 
cases where agencies or branch houses are oper- 


244 


Punched Hole Accounting 

ated in various cities or sections of the United 
States or abroad. It permits a review of busi¬ 
ness intelligently on a fully comparable basis. 
It allows a study of the value of the business 
secured, and the permanency of orders, by the 
comparison it makes possible in studying the 
element of returned goods, which necessitates 
extra handling charges and incurs a direct loss. 
It follows, therefore, that the greater the elimi¬ 
nation of returned goods and allowances, the 
greater the amount of net profit which remains 
with the business. 

The percentage of gross profit is, likewise, 
fully comparable as the question of volume is 
not a factor in considering the gross profit rate. 
For illustration, Boston shows a lower rate than 
any of the other offices, indicating that their 
sales consisted of a lower profit-bearing line of 
merchandise or, comparatively speaking, Bos¬ 
ton is not producing profits for the goods sold, 
at the same rate that the other agencies are. 

Philadelphia shows the best rate of gross pro¬ 
fits, but their Returns and Allowances are heavy, 
especially the former, when compared with New 
York, which shows an increase of approximately 
50% in gross sales, and a decrease of over 50% 
in returned goods. The prices secured by Phila- 


245 


Punched Hole Accounting 

delphia, however, show that they are obtaining 
maximum prices or that the class of material 
sold carries the increased rate of profit, as in¬ 
dicated by their gross profit rate. 

Chicago results in gross sales compare favor¬ 
ably with New York, but their gross profit rate 
is deficient and is lower than that of any other 
office, with the exception of Boston. The major 
portion of this deficiency, however, is due to their 
excessive allowances and policy adjustments, 
which, if eliminated or reduced to a comparable 
basis with New York, would have permitted 
them to show a rate of profit in excess of 23.0% 
instead of 20.9%. Chicago, which secured, as 
did Philadelphia, the maximum prices for goods 
sold, showed a decrease in profits earned, due 
to excessive allowances and policy adjustments. 

Continuing the review of this statement, 
which is probably one of paramount importance 
for every business, we are enabled to make a 
detailed study of the cost of doing business, 
showing the expense rates by offices, as well as 
indicating the principal items of operating ex¬ 
pense. These items of expense, while showing 
general classes only, can be supplemented, 
where conditions warrant, with a detailed re- 


246 


Punched Hole Accounting 

port of expenses for either an individual branch 
or for all offices, as desired. 

A comparison of expense rates or the cost of 
doing business, indicates Boston as incurring 
the lowest cost, while the Philadelphia rate is 
excessive as compared with Chicago or New 
York. These variations and comparisons in ex¬ 
pense rates show the ease with which a condi¬ 
tion of excessive expenditure can be located 
which, however, would not be noticeable if a 
comparison of the amount of expenses only was 
made. 

The next principal division on this report 
covers Bad Debts, making it possible to study 
the efficiency of credit work at each branch and 
the amount lost due to poor risks. 

Boston has the lowest debt loss in amount and 
in its relation to net sales of .8%. Chicago’s loss 
of $2,608.78, showing a rate of 2.2% to sales, in¬ 
dicates a tendency of either a too liberal policy 
of credit extension or a poor Collection Depart¬ 
ment. 

Philadelphia indicates the next best condi¬ 
tion, from a viewpoint of dollar and cent losses, 
for Bad Debts. However, based on the volume 
of business done, New York shows a loss of 


247 


Punched Hole Accounting 

slightly less than 1.0% as compared with 1.2% 
for Philadelphia. 

We have now reached a point where we can 
determine the amount and percentage of net 
profit, by branches or agencies, as well as 
having a knowledge of the factors which created 
the results secured by each agency. The de¬ 
ficient Boston rate is due, in principal, to the 
low profit-bearing merchandise they have sold. 
The New York results are due to the higher 
profit rates which they secured for the goods 
sold and their low Return and Allowance deduc¬ 
tions. The Philadelphia net profit rate, which 
is uniformly good, on a comparable basis, is like¬ 
wise due to higher gross profit rates. While 
their rates of gross and net profits are both 
good, their record for Returns and Allowances, 
however, requires attention. Chicago’s net re¬ 
sults, which show a deficient condition as com¬ 
pared with the other offices, are due to the ex¬ 
cessive amount of their Returns and Allowances. 

This report, which can be supplied on either 
a monthly basis or for the elapsed period of the 
year, is of special value to the executives of an 
organization and is one of the most important 
from a viewpoint of supplying volume informa¬ 
tion in condensed form, permitting an analysis 


248 


Punched Hole Accounting 

of operations from almost any angle and, as 
previously stated, should be considered of the 
same relative importance as the balance sheet 
of a business. 

The question of how to secure and accumul¬ 
ate an extended range of data, as indicated on 
this report, is one which naturally requires con¬ 
sideration, especially where invoices are made 
out and rendered by branches and in some cases 
Accounts Receivable are, as well, carried locally. 
As the analysis of sales probably covers the 
greatest volume of work, a brief but general 
outline will indicate how this work can be re¬ 
duced to virtually a routine operation, through 
the use of Electric Tabulating and Accounting 
Machines without, however, affecting the accu¬ 
racy of the report or value of figures used in the 
slightest detail. 

Furthermore, as the rendering of invoices at 
branches is naturally the most difficult to con¬ 
trol, specific reference will be made to branch 
office billing, but the principles and routines are, 
in reality, basic and can be readily adopted, 
with modifications, to meet other conditions. 

The first point to be considered is the coding 
of sales invoices for Branch, Customer, County, 
State and Salesman, which is an important 


249 


Punched Hole Accounting 

operation and must be done promptly and ac¬ 
curately. The Customer, Branch and Salesman 
Codes can be maintained in a readily accessible 
form at each branch office on card forms, sim¬ 
ilar to the one which appears on the following 
slide, which are made up in triplicate at the 
branch office when an account is opened for a 
new customer. Geographical Codes for States, 
Counties and Cities are published by The Tab¬ 
ulating Machine Company and are supplied in 
book form, ready for use. 

Code Cards are maintained, alphabetically, by 
name of customer, at the branch office, together 
with a numerical list of customers, in an ordin¬ 
ary memorandum book showing number, name 
and address of customer. As a number is ap¬ 
plied to a new customer, the customer’s name is 
immediately noted opposite this number, there¬ 
by always maintaining a numerical list of cus¬ 
tomers, indicating the next open number. 

A duplicate set of the code records should 
be maintained in the General Accounting De¬ 
partment. These duplicate copies which are 
originated by the branch office, are carbons 
of the code record made up and maintained 
there. As new accounts are opened, the branch 
office retains and files the original, alphabeti- 


Punched Hole Accounting 

cally, and forwards daily two copies of each new 
account, one copy being filed by the General 
Accounting Department in alphabetical se¬ 
quence by name of customer, under each 
branch, and the other copy filed numerically 
under the branch. These two cards supply, 
without an appreciable amount of work at either 
the branch or General Office, a complete dupli¬ 
cate of the records at each branch office or 
agency, permitting not only a verification of 
code numbers, if desired, but a key to the code 
numbers which have been assigned by branches 
to customers. 

Coding for Branch, Customer, County, State 
and Salesman should, therefore, be done at the 
point where invoicing is done, before copies of 
bills are forwarded to the General Accounting 
Department, as after once determining the var¬ 
ious code numbers it is merely necessary for 
branches to copy the code numbers appearing 
on these cards to the invoice, thereby assuring 
the origination of all accounting data at the 
point where the transaction was consummated, 
by the people who are interested in and will 
use the statistics supplied by the General Ac¬ 
counting Department. Material billed can be 
coded, as well, at branches, but this work is 


251 


Punched Hole Accounting 

usually done by the General Accounting Depart¬ 
ment upon receipt of the copies of branch office 
billing. 

The next slide will illustrate a new and highly 
specialized method of recording codes for 
Branch, Customer, County, State, Salesman and 
other classifications of a definite nature which 
are uniform to each item of an invoice. 

The codes on the card appearing before you 
are determined when a new customer is secured. 
At the time the first invoice is rendered, a suffi¬ 
cient number of cards is punched, showing all 
classifications of a general nature, as indicated 
on this card. After the original card is punched 
and verified, the additional cards are prepared 
through the use of the Duplicating Punch, there¬ 
by assuring absolute accuracy. The number of 
cards which it would be desirable to prepare 
would naturally depend entirely on the activity 
of an average account. If an account is affected 
every day, and it takes approximately twenty- 
four hours to punch, balance and return code 
cards to file for current invoices, three or four 
general code cards would probably be found suf¬ 
ficient to take care of all requirements, but the 
quantity can be readily varied to meet specific 
conditions. 


252 


Punched Hol^ Accounting 

These cards are used repeatedly for this pur¬ 
pose and are available for coding information 
whenever required. If punching is delayed, the 
additional code cards which have been prepared 
are available, making it unnecessary to look up 
codes for a specific customer or check classifica¬ 
tions, as under this plan of operation this was 
done when the account was originally opened, 
thereby assuring economy in coding and the 
absolutely accuracy of reports. 

After code cards are prepared, they are ar¬ 
ranged alphabetically and retained in the Tabu¬ 
lating Department for quick selection. Upon 
receipt of the invoices in this latter Depart¬ 
ment, a corresponding code card for each cus¬ 
tomer is withdrawn from file and kept in the 
same order as the arrangement of the invoices 
to be punched, which is generally alphabetical. 

Before punching a card for each different 
class of material included on an invoice, the 
code card which was withdrawn from the file 
is inserted in the Duplicating Punch and all 
coding is duplicated on each card which is to be 
punched without the necessity of noting the 
coding on individual invoices as has been the 
practice heretofore. 

The saving under this plan of operation is 


253 


Punched Hole Accounting 

naturally apparent, as it not only assures cor¬ 
rect classifications but it eliminates all clerical 
work in connection with coding data of a gen¬ 
eral nature. 

After the coding has been duplicated on the 
card inserted in the front punching mechanism 
the remainder of the information, such as class 
of material, amount of sales, cost of sales, and 
other data which refers to a specific item only, is 
individually punched on each card in the regu¬ 
lar manner. 

As punching for invoices is completed, code 
cards are removed from the machine and kept 
in a separate stack, with other code cards, in the 
same order as when originally taken from file, 
thus facilitating re-filing of the cards for future 
use. 

A recapitulation form of daily billing, as 
shown on the next slide, should be made up in 
duplicate, the original being retained by the 
branch house or agency, and the duplicates 
forwarded daily with the corresponding copies 
of invoices. 

This recapitulation form not only shows order 
or invoice numbers, whichever is preferable, 
but the amount of each invoice, as well, supply¬ 
ing a pre-determined daily sales total against 


254 


Punched Hole % ^Accounting 

which reports must check. The total of the re¬ 
capitulation sheet can be further used by the 
Bookkeeping Department for their control fig¬ 
ures. 

The comparatively simple methods and rou¬ 
tines, as outlined, indicate the ease with which 
a plan of centralized accounting can be adopted 
and after the report on “Analysis of Branch 
Sales and Profits” has been compiled, the same 
cards can be used for controlling stocks of 
branches and for obtaining other sales statis¬ 
tics. 

Report of Geographical Sales 

102 

A study of the productivity of salesmen and 
of the volume of goods sold, by specific lines or 
classes of material, is important, but to assure 
securing a relative amount of business, as com¬ 
pared with the productivity of each territory, it 
is of the utmost importance to obtain a geogra¬ 
phical analysis of sales. 

As trade reports, census reports and data of 
a like nature are usually based on States, Coun¬ 
ties and Towns, it is, under the circumstances, 
advisable to either make up a report of this na¬ 
ture on a definite State, County or Town basis, 


255 


Punched Hole Accounting 

pr a division comprised of these geographical 
units. 

Tabulating Cards, covering the sales for a 
specific month or period, can be readily sorted 
into the same geographical order in which the 
potential buying power of a geographical unit 
has been arranged. The combination of these 
two factors immediately indicates the produc¬ 
tivity of a State, County or geographical divi¬ 
sion. 

Please note that the report appearing before 
you not only shows the results, as compared 
with the potentialities of a specific locality, for 
a given month, but also for the preceding month, 
as well as the cumulative sales for both the cur¬ 
rent year and the preceding year, together with 
the percentage of business secured as compared 
with the sales possibilities in a State or geo¬ 
graphical division. A report of this nature 
supplies highly indicative information, in con¬ 
densed form, permitting a detailed study of 
distribution, with the minimum expenditure of 
time. 

The use of proper sales potentials for a State 
or Territory, is an important factor in determin¬ 
ing sales yield as compared with sales possibil¬ 
ities. The use of a quota or sales potential, how- 

256 


Punched Hole Accounting 

ever, varies in accordance with the class of busi¬ 
ness. For illustration, a publishing house would 
base its quotas on educated whites, by City, 
County or State, against which subscriptions 
received from these same sections would be ap¬ 
plied. An automobile tire business would base 
its quotas on car registrations in a given sec¬ 
tion or geographical division, using as a stand¬ 
ard the average tire consumption per car. 
A dress manufacturer would base quotas 
for a State or County on female population. 
An agricultural machinery concern, who special¬ 
ize in cream separators, would investigate the 
fertility of territories by securing the number of 
milk-producing cows, by Counties. 

You will note, therefore, that while quotas 
are individual they can, however, be readily se¬ 
cured from trade reports and other sources. 
The statements published by the United States 
Census Bureau on Agricultural & Manufactur¬ 
ing Statistics are especially valuable for this 
purpose as the data is given in such detail that 
almost any industrial subject can be reviewed 
and a basis for establishing a quota arrived at 
readily. 


257 


Punched Hole Accounting 

Sales by Cities In Excess of 50,000 Population 
103 

The report appearing before us is a further 
refinement of the geographical report covering 
sales by States, and permits a finer analysis of 
distribution by the larger centers of population 
in each State, making possible a general review 
of results, compared with corresponding sec¬ 
tions, where the major portion of business is, 
or possibly should be done. 

The use of this report in conjunction with the 
geographical report of sales, by States, will de¬ 
termine the amount of business done in the 
larger cities as well as in outlying centers. 

The current month’s sales, appearing on this 
report, as compared with those for the previous 
month, and the cumulative sales for the current 
year and preceding year, offer an excellent op¬ 
portunity for determining progress or retrogres¬ 
sion, permitting the adoption of corrective mea¬ 
sures where deficient conditions exist, before 
the current month has advanced to a point 
which may result in another decrease from the 
same locality. 


258 


Punched Hole Accounting 

Customers Sales Analysis 

104 

General statements of business facts, for use 
by executives and department heads, are needed 
for the proper management and direction of a 
concern, but there is an unavoidable element 
of detail that is essential in all businesses, 
which, however, can be delegated to the re¬ 
search or clerical division of an organization. 
The records assigned to these divisions should 
necessarily be in simplified form, but with suffi¬ 
cient information as to automatically indicate 
deficient conditions or satisfactory progress. 

In general, such delegated responsibilities 
should cover the maintaining of records which 
would immediately indicate conditions that 
should be called to the attention of the executive 
or department head for possible further con¬ 
sideration and investigation. 

The illustration which will appear on the next 
slide shows a record which can readily be main¬ 
tained through the use of Electric Tabulating 
and Accounting Machines. 

A further study of this form and the one fol¬ 
lowing will indicate that they are of a type that 
where deficient County or Customers’ Sales are 


259 


Punched Hole Accounting 

% indicated, they are reported in a routine manner 
and do not call for the exercise of judgement, as 
the reporting of conditions, in conjunction with 
these records, is not a matter of opinion but 
merely one where decreases or, if desired, ab¬ 
normal increases, appearing on Customers’ 
Cards, are automatically called to the attention 
of the proper executive. 

The slide appearing before you shows the 
name of the Company, the address, the County 
and the State in which the customer is located. 
The data appearing on this record is supplied, 
again, from the same set of cards from which 
the various reports covering sales facts were 
compiled, the information being secured by 
merely a re-arrangement and tabulation of these 
same cards. 

The form illustrated supplies the results, for a 
period of two years, by months, of six principal 
classes of merchandise, indicating reduced buy¬ 
ing tendencies as well as those which are in¬ 
creasing or showing a stabilized condition. The 
number of principal classes of merchandise re¬ 
corded can naturally be either increased or de¬ 
creased, in accordance with the requirements of 
a business. 

Considering Class 300, it would appear to in- 


260 


Punched Hole Accounting 

dicate that either a seasonal condition exists, 
that the concern is overstocked or that they are 
securing this class of material from some other 
source of supply. But regardless of the pre¬ 
sumed conditions, the General Sales Depart¬ 
ment should be advised of the decrease in vol¬ 
ume, and the salesman, in whose territory the 
customer is located, informed, providing the 
goods covered by this class are not seasonal. 

Class 100 shows a constant volume of busi¬ 
ness, with the exception of the latter part of the 
year, which may be due to a seasonal or pre¬ 
inventory condition. Experience of the business 
would indicate this fact. 

Classes 400, 500 and 600 show a compara¬ 
tively light demand, in general. However, the 
possible conditions referred to are based upon 
the record of a single concern, but the follow¬ 
ing slide will illustrate the ease with which con¬ 
clusions can be arrived at as to the relative buy¬ 
ing status of individual customers as compared 
with demand. 

Geographical Sales Analysis 

105 

This slide, as you will notice, shows a card 
form, again, with a tab, and covers the total sales 


261 


Punched Hole Accounting 


to all customers in a County. The numbers on 
the center guide appearing before you, show the 
County Code and the State Code. The guide on 
the customer’s card, previously presented, ap¬ 
peared on either the right or left end of the card 
and, in addition to indicating the County and 
State Code numbers, showed the customer’s 
number as well, thereby supplying records which 
can be located with ease and which are readily 
accessible at all times. 

Statistics of this nature are of inestimable 
value in watching the buying tendency of cus¬ 
tomers and obtaining details as to the general 
distribution of material by classes, communities 
or territories. 

The illustration appearing before you shows 
the total business done in a specific County, and 
permits arriving at basically accurate conclu¬ 
sions, as the total business done in a given geo¬ 
graphical unit is recorded on this card. Again 
referring to the reduction in sales appearing 
on the customer’s record, presented on the pre¬ 
ceding slide, you will notice that the sales for 
Class 800, to all customers in this County, show 
a general reduction in volume during the lat¬ 
ter part of the year, indicating a probable sea¬ 
sonal condition. The presumption of possible 


262 


Punched Hole Accounting 

overstock or competition referred to when re¬ 
viewing the customer’s record appearing on the 
previous slide may, therefore, be discounted. 

Class 100, for the months of November and 
December, shows a like condition, as indicated 
on the customer’s record. 

Class 400 indicates a limited demand through¬ 
out the entire County for these goods. 

Class 500 shows a fairly consistent demand 
for the material covered by this classification, 
while the customer’s record, you will recall, indi¬ 
cated but slight purchases of this material 
throughout the year, showing that while there 
is a fairly consistent demand for the goods in 
question in the general locality of this customer, 
these people are, however, apparently obtaining 
the material from some other source. 

Salesmen’s Sales Records 

106-107-108-109 

The next form appearing before you will illus¬ 
trate an advanced step in the practice of selling, 
as it supplies each salesman with a detailed rec¬ 
ord of the sales made to every customer located 
in a salesman’s territory. The salesmen maintain 
these records by posting the data, forwarded by 


263 


Punched Hole Accounting 

the General Sales Department, which is com¬ 
piled by Electric Accounting Machines from 
punched cards. 

The use of this information does away with 
the rule of guesswork. It shows a salesman 
the amount of the previous month’s purchases 
made by each customer and the volume of busi¬ 
ness done for the elapsed period of the year, 
thereby enabling the field organization to keep 
in close touch with the buying tendencies of a 
concern. Information of this nature is of special 
value where the purchases of a specific customer 
show an inclination to decrease, as it supplies 
the salesman with this information before the 
condition is permitted to continue for an ap¬ 
preciable period. 

The form illustrated on the slide before you 
is used by one of the large oil companies and 
shows the total amount of business secured, to¬ 
gether with equipment data for each customer. 
Total sales for both the current and the pre¬ 
ceding year appear on the one side of the sheet. 
The next slide will indicate the reverse side of 
the same form, showing the volume of business 
done, by classes, in quantities, but dollar and 
cent sales can be obtained readily, as indicated 
by the next slide, which shows a form used by 
264 


Punched Hole 'Accounting 

salesmen of one of the nationally known rubber 
companies. 

The following* slide will represent the form 
used by the General Sales Department of this 
same rubber company for supplying salesmen 
with the record of sales, which is posted to the 
customer’s cards by the salesman. This form is 
compiled, in its entirety, with the aid of Elec¬ 
tric Accounting Machines, information being 
secured from the same punched cards from 
which other reports and statistics were ob¬ 
tained. 

Another form which can be used to advantage 
by salesmen for this purpose appears on the 
next slide and is a duplicate, excluding the tab, 
of the Customers Sales Analysis Card previously 
shown. This form furnishes all essential infor¬ 
mation and can be supplied in loose-leaf book 
form for the use of salesmen. 

The General Sales Manager of one large con¬ 
cern inspects these records periodically, thereby 
guarding against the non-recording of data 
supplied by the general sales organization, the 
books for those members of the sales force 
whose results are deficient being called for more 
often. 

This plan is one of economic value to every 


265 


Punched Hole Accounting 

sales organization, and can be adopted, to uni¬ 
form advantage, by concerns employing a few 
salesmen as well as by organizations who require 
an unlimited number of representatives, as it 
supplies the members of the field force with in¬ 
formation which will assure maximum returns 
for the time spent in the field. 

Voucher Analysis 
110-111 

The use of Electric Tabulating and Account¬ 
ing. Machines is not limited to statistical reports 
and statements of an analytical nature, but they 
can be used to direct advantage in connection 
with General Ledger Accounts, preparation of 
journal entries, making up of analysis sheets 
for use in compiling statements at a later period 
and, in general, for supplying details and sup¬ 
plementary data which are essential in all Ac¬ 
counting Departments. 

The form appearing before you shows 
the General Ledger Account, the sub-account 
and the amount of each item, and forms the 
basis for the debits to the various General 
Ledger Accounts. All of this information is 
obtained from cards punched direct from either 


266 


Punched Hole Accounting 

the voucher, voucher copy or invoice, and in¬ 
cludes not only purchases of raw materials and 
finished merchandise, but expense supplies, 
plant additions and other items, as well as petty 
cash vouchers, illustrating the ease with which 
purchases can be analyzed, not only for general 
ledger accounts but for use in making up sta¬ 
tistics of a varying nature and character. 

Tabulating Cards are permanent records, and 
readily supply the details for an individual item, 
or for an entire account, as they indicate the 
source from which all accounting and statistical 
data is obtained, making possible the immediate 
location of the invoice, contract or other original 
record which the payment covers. 

Distributing Expense Report 

112-113 

Expenses are an essential in every business, 
but the expenditure of funds should be properly 
supervised. To do so, details are necessary. 
Determining expenditures on a basis of compar¬ 
ing total expenses with a preceding month or a 
number of months of a preceding period, not 
only fails to supply any information of value, 
but it is also a dangerous practice. 

Expenses, as referred to, cover not only those 


267 


Punched Hole Accounting 

of an operating* nature, but burden or overhead, 
as well, and in order to differentiate between 
essential and non-essential expenditures, a de¬ 
tailed analysis, as indicated by the report ap¬ 
pearing before you, is indispensable. 

This report, as will be noticed, shows a com¬ 
parison of the current month and the previous 
month, and the corresponding month of the pre¬ 
vious year, as well as the cumulative periods of 
the present and preceding year. These figures 
are accumulated through the use of Electric 
Tabulating and Accounting Machines with the 
same ease and element of simplicity as those 
covering manufacturing costs, sales and other 
classes of statistics. 

Details of this nature guard against the as¬ 
sumption that expenses are decreasing when 
those of the current month show a reduction, 
due to the elimination of an abnormal item of 
expenditure which appeared in the expenses for 
the preceding period, for while a comparison of 
totals only may indicate an apparent decrease, 
expenses, in reality, may be showing a tendency 
to increase. 

For illustration, we will assume that the total 
overhead in a manufacturing organization 
amounts to $54,000.00, as compared with $60,- 
268 


Punched Hole Accounting 


000.00 for the same period of the preceding year, 
with production at approximately the same rate 
of output. A comparison of total expenditures 
only, would appear to indicate that expenses for 
the period had decreased $6,000.00. However, 
in the items of expenses for the preceding year 
there was one amounting to $7,500.00, covering 
depreciation of machinery; another of $5,000.00, 
due to defective work which was scrapped. Or, 
eliminating these abnormal items from the pre¬ 
ceding year’s overhead, a normal expense of 
$47,500.00 is noted, as compared with $54,000.- 
00 for the current year, indicating not a de¬ 
crease of $6,000.00, or 10%, but an actual in¬ 
crease in normal expenses of $6,500.00. 

Please note that the five months’ previous 
year’s expenses, appearing on the report before 
you, show a total of $295,806.59, as compared 
with $252,895.50, or an apparent decrease of 
$42,911.09. However, assuming that $22,000.00 
is included in the previous year’s expenses, for 
extra compensation for Executive and Sales De¬ 
partments, which is not offset by a like amount 
in the current year, and that a $10,000.00 item 
of the same nature is included in the office sal¬ 
aries for the previous year and is likewise not 


269 


Punched Hole Accounting 

offset in the current year, the apparent economy 
or reduction in normal expenses would not be 
$43,000.00 but would be reduced to $11,000.00. 

A report of this nature will permit an intelli¬ 
gent consideration and detailed study of ex¬ 
penditures, indicating those requiring attention, 
and is of vital importance to a business, whether 
of a manufacturing, distributing or service na¬ 
ture. 


Tabulating Card Bank Checks 

114-115-116-117-118-119 

One of the recent uses to which Tabulating 
Machines have been applied has been the adop¬ 
tion of the Tabulating Card as a bank check, as 
illustrated on the next slide. 

The time and labor saving possibilities, 
through the use of a bank check of this nature, 
can readily be appreciated when it is realized 
that these checks, after being prepared and 
punched before being sent out, offer absolute 
protection and security against alteration, as a 
punched hole is not subject to change. 

The use of Tabulating Card Checks readily 
permits the adoption of simplified methods and 
procedures. By giving each supplier and ledger 
account a number and punching these numbers 
270 


Punched Hole Accounting 

on Tabulating Card Checks, cash disbursement 
sheets can be made up in conjunction with the 
Electric Accounting Machine directly from the 
checks themselves-, eliminating entirely the writ¬ 
ing of cash disbursements. Furthermore, the 
printed record, in addition to showing code num¬ 
bers for supplier’s or general ledger accounts, 
will, with the same operation, indicate the check 
number and amount of each payment, and sup¬ 
ply the cash book footings. The assigning of 
code numbers, in addition to names and other 
identifying information appearing on each 
ledger account, enables the more rapid posting 
of cash disbursements, as these printed sheets 
are more legible than those ordinarily written 
by hand, and as ledger accounts would be ar¬ 
ranged numerically and therefore, located more 
readily, the amount of time required to post 
these items would be materially decreased. 

Upon return of the cancelled checks from the 
bank, in addition to being footed they can be 
listed, in numerical sequence, with the same 
operation, and the missing check numbers, rep¬ 
resenting the outstanding checks, located with 
ease from this printed list and at a considerable 
saving over the present method which necessi- 


271 


Punched Hole Accounting 


tates the arranging of cancelled checks in nu¬ 
merical sequence manually, after which they 
are checked individually against the correspond¬ 
ing item in the cash book. 

The payment of dividends with Tabulating 
Card Checks readily permits the compilation of 
special dividend reports, including the statement 
illustrated next, required by the Federal Gov¬ 
ernment, showing the amount of dividends paid 
to each stockholder of a concern, the names of 
stockholders being inserted after the report has 
been compiled, in accordance with the index 
number punched on the check. This information 
is all punched on the Dividend Check before it is 
sent out. After bank balances have been veri¬ 
fied the cancelled checks are sorted to index or 
stockholder’s number, and at the close of the 
year the cancelled checks are listed and totaled 
direct on the report form submitted to Wash¬ 
ington. The total amount of dividends paid to 
each stockholder is accumulated on the Tabu¬ 
lator and reported in a single amount. With 
the same operation the grand total of all divi- 1 
dend payments is obtained, thereby verifying 1 " 
the accuracy of the report to the Government ' 
of individual dividend payments. 

It is estimated that ninety per cent, of the 


272 


Punched Hole Accounting 

business transactions in this country are han¬ 
dled through the medium of checks, and as all 
business organizations, regardless of the size 
or class of business, issue checks and verify 
bank balances, the use of Tabulating Card 
Checks will effect immediate and varied econo¬ 
mies in handling this enormous volume of work. 

Conclusion 

The subject of Electric Tabulating and Ac¬ 
counting Machines, as presented, merely covers 
a general outline of the principle of Punched 
Hole Accounting. The comparisons of individu¬ 
al items on the various reports referred to, cover 
but a few of the factors which an analysis of 
the figures of a business will indicate. No at¬ 
tempt has been made to discuss the finer details 
of accounting and statistics, but Electric Tabul¬ 
ating and Accounting Machines are so flexible 
they will compile, distribute or analyze any kind 
of information represented by figures, more 
’eadily, in greater detail and at a lesser cost 
han it is possible to do manually or in any 
>ther manner. 


273 
















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. 










































































































' 

















































. 































INDEX 
Part I 

Page 

Advertising and How to Use It. 42 

Approaching a Prospect. 55 

Avoid Antagonism . 61 

Be Persistent. 62 

Business Survey Forms—Use of. 102 

Buyer's Attitude . 59 

Closing the Sale. 87 

Confidence. 24 

Controlling the Interview. 63 

Courage. 27 

Courtesy and Good Manners. 23 

Don't Ask Questions That Suggest Nega¬ 
tive Answers . 65 

Don’t Give Imaginary Demonstrations in 

Your Interview.. 68 

Don’t Talk Yourself Out of an Order. 67 

Don’t Use Technical Terms. 61 

Duties of a Salesman. 35 

Five Essentials to the Salesman’s Success 9 

Health . 9 

Honesty. 10 

Ability .’• • • H 

Industry.. ... 11 

Knowledge of the Business. 12 

Further Essentials in Selling Tabulating 

Machine Service. 94 

Gain Your Prospect’s Confidence. 66 

How to Operate a Territory. 36 

How to Work a Provincial Territory. 46 

275 



























Page 

How and Why—In Demonstrating. 78 

How to Learn to Demonstrate. 82 

Initiative . 25 

Interview—The . 56 

Loyalty . 29 

Mental Attitude. 18 

Method of Introduction. 53 

Method of Questioning. 64 

Never Say That Tabulating Machines Can¬ 
not Be Used. 99 

Office Details . 36 

Open-Mindedness . 28 

Personal Appearance . 22 

Plan Your Work. 38 

Preparation for the Approach. 52 

Presentation and Survey. 72 

Reasons Why a Salesman May Fail. 32 

Resourcefulness . 27 

Salesman’s Equipment. 48 

Sales Manual—Purpose of. 7 

Secure a Definite Appointment for a Dem¬ 
onstration . 69 

Securing of the Interview. 51 

Seek New Prospects Daily. 41 

Self-Analysis . 30 

Self-Respect . 22 

Self-Satisfaction . 28 

Single Distributions . 101 

Special Points to Remember. 84 

Study Your Prospect. 65 

Supervision and Self-Supervision. 29 

Tabulating Machines—The Purpose of... 15 


276 































Page 


Tact . 23 

Things a Tabulating Machine Salesman 

Must Know. 21 

Three Steps in a Sale. 50 

Ticketograph Customers Are Future Tab¬ 
ulating Machine Users. 98 

Two Kinds of Selling. 13 

Value of Daily Call Report. 40 

Value of a Prospect List. 40 

What the T. M. Company Gives and 

Demands .. . 17 

Work . 32 

Work Your Territory Closely. 37 

Your Object: Success. 19 


277 













INDEX 

Part II 

Page 

Advertising Costs and Sales—Report of. . 241 
Basic Information Is Essential for Correct 

Costs . 178 

Basic Record from Which Tabulating 

Cards Are Punched. 228 

Census Card—1900 . 114 

Codes—Customer .. 249 

Code Cards—Customer . 252 

Cost Analysis . 163 

Distributing Expense Report. 267 

Governments—Use of Tabulating Machines 

by . 140 

Idle Machine Report. 169 

Inventory Simplified .210 

Labor Analysis .. 166 

Labor Change—Report of. 175 

Labor Distribution . 166 

Labor Turnover—Report of. 170 

Material Analysis . 201 

Material—The Control of. 206 

Parts and Operation Costs—Report of. . . 168 

Payroll. 165 

Payroll Preparation . 162 

Plug Board—Blank. 158 

Plug Board—Wired .. ... 155 

Punching Mechanisms—Present. 130 

Punch—Electric Duplicating Key. 131 

Punch—Electric Key. 130 

278 

























Page 

Punch—Gang. 134 

Punch—Key. 130 

Punch—Original Key. 115 

Punch—Verification Key... 132 

Sales—Customers Analysis.-. 259 

Sales—C ustomers and Geographical 

Analysis . 226 

Sales—Geographical Analysis. 261 

Sales—Geographical Report of. 255 

Sales and Profits—Branch Analysis. 244 

Sales and Profits by Salesmen and Classes 

—Analysis of. 227 

Sales and Quotas by Salesmen—Analysis 

of . 229 

Sales by Cities in Excess of 50,000 Popu¬ 
lation .. 258 

Sales by Classes of Materials—Report of . 237 
Sales by Profit Rates and Principal Classes 

of Merchandise—Analysis of. 239 

Sales by Salesmen—Report of Average. . . 235 
Sales by Salesmen and Principal Classes of 

Merchandise—Analysis of. 234 

Sales Expenses and Profits by Salesmen— 

Analysis of. 231 

Sales Records—Salesmen’s. 263 

Slides—Use of . 107 

Sorting Machine—Electric . 135 

Sorting Tray—Tabulating Card. 137 

Stock Turnover—Report of. 203 

Tabulating Card Bank Checks. 270 

Tabulating Card—Index Stop. 129 

279 
























Page 


Tabulating Cards—Individualizing. 127 

Tabulating Cards—Preparation of and Re¬ 
cording Facts on. 122 

Tabulating Cards—Specimen of Basic.... 120 

Tabulating Card—Stop . 128 

Tabulating Machines—Pioneers in Use of. 149 
Tabulating Machines: 

Electric Accounting Machine . 153 

Electric Automatic-Control Tabulating 

Machine. 151 

Electric Card Counting Tabulating 

Machine . 160 

Electric Tabulating Machine. 137 

First Commercial Tabulator. 119 

First Population Tabulator. 116 

Time Recorder—Job .. .. 180 

Time Recorder—Money—International .. . 181 

Ticketograph—International. 194 

Flexibility of International Ticketo¬ 
graph Production Control.. 199 

Locating and Reviewing Orders. 198 

Payroll. 194 

Production Board. 196 

Production Control. 195 

Voucher Analysis . 266 

Weighing Devices Which Assure Accurate 

Costs and Records. 221 

Counting and Computing Scale. 221 

Heavy Duty Scale. 224 

Porcelain Scale . 225 


280 























Subjects for Illustrated Lectures with 


Slides 

Pages 

1. History of Punched Hole 

Accounting .112-120 

2. The Basis of the Tabulat¬ 
ing Machine Method.120-130 

3. Some of the Machines Used 

in Punched Hole Account¬ 
ing .130-140 

4. Uses Which Indicate the 

Flexibility of Electric Tab¬ 
ulating and Accounting 
Machines .140-151 

5. The Improvements in Ma¬ 
chines Used for Punched 

Hole Accounting.151-162 


6. How to Compile Payrolls 

and Secure Accurate Labor 
Costs with Electric Tabu¬ 
lating and Accounting 
Machines.162-168 

7. Losses Which Can Be 
Eliminated Through the 
Use of Electric Tabulat¬ 
ing and Accounting 


Machines .169-178 

8. Devices Which Originate 
Correct Costs Compiled by 
Electric Tabulating and 
Accounting Machines.178-193 


Lantern 

Slides 

1 - 11 
12 - 20 

21- 43 

44- 45 

46- 50 

51- 56 

57- 60 

61- 66 


281 










Pages 


Slides 


9.* The Machine Which Pro¬ 
vides Simplified Methods 
in Businesses Using Cou¬ 
pons for Payroll and Pro¬ 
duction Control.194-201 67- 74 

10. Protecting Inventories 
from Overstocks and 
Maintaining Stock Records 
Which Agree with Ledger 

Balances .201-210 75- 80 

11. Guarding Against Inven¬ 
tory Deficits .210-221 81- 86 

12. Weighing Devices Which 
• Assure Accurate Costs and 

Records.221-226 87- 89 

13. How Distribution Is Ana¬ 

lyzed and Sales Results, 
by Salesmen, from Many 
Viewpoints, Secured.226-237 90- 95 

14. Reports Which Safeguard 
Your Sales from Hidden 

Losses. 237-255 96-101 

15. Records Which Show 

Where Sales Are Made. .225-266 102-109 

16. Analyzing Expenses, and 
Other Varied Uses of 
Electric Tabulating and 
Accounting Machines.. .. .266-273 110-119 


A 


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